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EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
Among
XXXXX INC.,
XXXXXX & XXXXX CORPORATION
and
EG ACQUISITIONS CORP.
Dated as of October 7, 1996
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TABLE OF CONTENTS
PAGE
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RECITALS..................................................................... 1
ARTICLE I
The Merger; Closing; Effective Time ................... 1
1.1. The Merger.................................................. 1
1.2. Closing..................................................... 2
1.3. Effective Time.............................................. 2
ARTICLE II
Articles of Organization and By-Laws
of the Surviving Corporation ...................... 2
2.1. The Articles of Organization................................ 2
2.2. The By-Laws................................................. 3
ARTICLE III
Officers and Directors
of the Surviving Corporation ...................... 3
3.1. Directors................................................... 3
3.2. Officers.................................................... 3
ARTICLE IV
Effect of the Merger on Capital Stock;
Exchange of Certificates ........................ 3
4.1. Effect on Capital Stock..................................... 3
(a) Merger Consideration................................. 3
(b) Company Options...................................... 4
(c) Cancellation of Shares............................... 4
(d) Merger Sub........................................... 4
4.2. Exchange of Certificates for Shares......................... 4
(a) Exchange Agent....................................... 4
(b) Exchange Procedures.................................. 4
(c) Distributions with Respect to Unexchanged Shares;
Voting.............................................. 5
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(d) Transfers............................................ 6
(e) Fractional Shares.................................... 6
(f) Termination of Exchange Fund......................... 6
(g) Lost, Stolen or Destroyed Certificates............... 7
(h) Affiliates........................................... 7
4.3. Dissenters' Rights.......................................... 7
4.4. Adjustments to Prevent Dilution............................. 7
ARTICLE V
Representations and Warranties ..................... 8
5.1. Representations and Warranties of the Company............... 8
(a) Organization, Good Standing and Qualification........ 8
(b) Capital Structure.................................... 9
(c) Corporate Authority; Approval and Fairness........... 9
(d) Governmental Filings; No Violations..................10
(e) Company Reports; Financial Statements................11
(f) Absence of Certain Changes...........................11
(g) Litigation and Liabilities...........................12
(h) Employee Benefits....................................12
(i) Compliance with Laws; Permits........................14
(j) Takeover Statutes....................................14
(k) Environmental Matters................................15
(l) Accounting and Tax Matters...........................16
(m) Taxes................................................16
(n) Labor Matters........................................17
(o) Insurance............................................17
(p) Intellectual Property................................18
(q) Rights Plan..........................................19
(r) Product Liability and Recalls........................19
(s) Accounts Receivable..................................20
(t) Inventory............................................20
(u) Warranties...........................................20
(v) Brokers and Finders..................................20
5.2. Representations and Warranties of Parent and Merger Sub.....20
(a) Capitalization of Merger Sub.........................20
(b) Organization, Good Standing and Qualification........21
(c) Capital Structure....................................21
(d) Corporate Authority..................................22
(e) Governmental Filings; No Violations..................22
(f) Parent Reports; Financial Statements.................23
(g) Absence of Certain Changes...........................23
(h) Accounting and Tax Matters...........................24
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(i) Brokers and Finders..................................24
(j) Environmental Matters................................24
ARTICLE VI
Covenants ...............................24
6.1. Company Interim Operations..................................24
6.2. Parent Interim Operations...................................26
6.3. Acquisition Proposals.......................................26
6.4. Information Supplied........................................28
6.5. Stockholders Meetings.......................................28
6.6. Filings; Other Actions; Notification........................28
6.7. Taxation and Accounting.....................................30
6.8. Access......................................................30
6.9. Affiliates..................................................31
6.10. Stock Exchange Listing and De-listing.......................32
6.11. Publicity...................................................32
6.12. Benefits....................................................32
(a) Stock Options........................................32
(b) Election to Parent's Board of Directors..............33
(c) Other Employee Benefits..............................33
6.13. Expenses....................................................33
6.14. Indemnification; Directors' and Officers' Insurance.........34
6.15. Other Actions by the Company and Parent.....................35
(a) Rights...............................................35
(b) Takeover Statute.....................................35
(c) Dividends............................................35
6.16. Parent Vote.................................................35
ARTICLE VII
Conditions ...............................36
7.1. Conditions to Each Party's Obligation to Effect the Merger..36
(a) Stockholder Approval.................................36
(b) NYSE Listing.........................................36
(c) Regulatory Consents..................................36
(d) Litigation...........................................36
(e) S-4..................................................37
(f) Blue Sky Approvals...................................37
7.2. Conditions to Obligations of Parent and Merger Sub..........37
(a) Representations and Warranties.......................37
(b) Performance of Obligations of the Company............37
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(c) Consents Under Agreements............................37
(d) Tax Opinion..........................................37
(e) Dissenting Shares....................................38
(f) Rights Agreement.....................................38
(g) Affiliates Letters...................................38
(h) Accountant Letters...................................38
7.3. Conditions to Obligation of the Company.....................38
(a) Representations and Warranties.......................38
(b) Performance of Obligations of Parent and Merger Sub..38
(c) Tax Opinion..........................................38
(d) Accountant Letters...................................39
ARTICLE VIII
Termination ..............................39
8.1. Termination by Mutual Consent...............................39
8.2. Termination by Either Parent or the Company.................39
8.3. Termination by the Company..................................39
8.4. Termination by Parent.......................................40
8.5. Effect of Termination and Abandonment.......................40
ARTICLE IX
Miscellaneous and General .......................42
9.1. Survival....................................................42
9.2. Modification or Amendment...................................42
9.3. Waiver of Conditions........................................42
9.4. Counterparts................................................42
9.5. GOVERNING LAW; WAIVER OF JURY TRIAL.........................42
9.6. Notices.....................................................43
9.7. Entire Agreement............................................44
9.8. No Third Party Beneficiaries................................44
9.9. Obligations of Parent and of the Company....................44
9.10. Severability................................................44
9.11. Interpretation..............................................45
9.12. Assignment..................................................45
EXHIBITS
A-1 Affiliates Letter
A-2 Pooling Affiliates Letter
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AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER (hereinafter called this "AGREEMENT"),
dated as of October 7, 1996, among XXXXX INC., a Massachusetts corporation (the
"COMPANY"), XXXXXX & XXXXX CORPORATION, a Tennessee corporation ("PARENT"), and
EG ACQUISITIONS CORP., a Delaware corporation and a wholly owned subsidiary of
Parent ("MERGER SUB"; the Company and Merger Sub sometimes being hereinafter
collectively referred to as the "CONSTITUENT CORPORATIONS").
RECITALS
WHEREAS, the respective boards of directors of each of Parent, Merger
Sub and the Company have approved the merger of Merger Sub with and into the
Company (the "MERGER") and approved the Merger upon the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, it is intended that, for federal income tax purposes, the
Merger shall qualify as a reorganization under the provisions of Section 368(a)
of the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "CODE");
WHEREAS, for financial accounting purposes, it is intended that the
Merger shall be accounted for as a "pooling-of-interests"; and
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW, THEREFORE, in consideration of the premises, and of the respective
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
The Merger; Closing; Effective Time
1.1. THE MERGER. Upon the terms and subject to the conditions set forth
in this Agreement, at the Effective Time (as defined in Section 1.3) Merger Sub
shall be merged with and into the Company and the separate corporate existence
of Merger Sub shall thereupon cease. The Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "SURVIVING
CORPORATION"), and the separate corporate existence of the Company with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger, except as
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set forth in Article II. The Merger shall have the effects specified in the
Massachusetts Business Corporation Law, as amended (the "MBCL") and the Delaware
General Corporation Law (the "DGCL").
1.2. CLOSING. The closing of the Merger (the "CLOSING") shall take
place (i) at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx at 9:00 A.M. on the first business day on which the last to be fulfilled or
waived of the conditions set forth in Article VII (other than those conditions
that by their nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver of those conditions) shall be satisfied or waived in
accordance with this Agreement or (ii) at such other place and time and/or on
such other date as the Company and Parent may agree in writing (the "CLOSING
DATE").
1.3. EFFECTIVE TIME. As soon as practicable following the Closing, the
Company and Parent will cause an Articles of Merger (the "MASSACHUSETTS ARTICLES
OF MERGER") to be executed and filed with the Secretary of State of
Massachusetts as provided in Section 79 of the MBCL. As soon as practicable
following the Closing, the Company and Parent will cause a Certificate of Merger
(the "DELAWARE CERTIFICATE OF MERGER") to be executed and filed with the
Secretary of State of Delaware as provided in Section 252 of the DGCL. As soon
as practicable following the Closing, Parent will cause an Articles of Merger
(the "TENNESSEE ARTICLES OF MERGER") to be executed and filed with the Secretary
of State of Tennessee as provided in Section 00-00-000 of the Tennessee Business
Corporation Act. The Merger shall become effective at the time when the
Massachusetts Articles of Merger and the Delaware Certificate of Merger have
been duly filed with the Secretary of State of Massachusetts and the Secretary
of State of Delaware, respectively, and at the time that the Tennessee Articles
of Merger have become effective (the "EFFECTIVE TIME").
ARTICLE II
Articles of Organization and By-Laws
of the Surviving Corporation
2.1. THE ARTICLES OF ORGANIZATION. The articles of organization of the
Company as in effect immediately prior to the Effective Time shall be the
articles of organization of the Surviving Corporation (the "CHARTER"), until
duly amended as provided therein or by applicable law, except that Article 3 of
the Charter shall be amended to provide in the column for shares of stock with
par value that the number of shares of common stock shall be 1,000. The purpose
of the Surviving Corporation shall be the purpose as set forth in Article 2 of
the Company's articles of organization in effect immediately prior to the
Effective Time.
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2.2. THE BY-LAWS. The by-laws of the Company in effect at the Effective
Time shall be the by-laws of the Surviving Corporation (the "BY-LAWS"), until
thereafter amended as provided therein or by applicable law.
ARTICLE III
Officers and Directors
of the Surviving Corporation
3.1. DIRECTORS. The directors of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the directors of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Charter and the By-Laws.
3.2. OFFICERS. The officers of the Company at the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the Charter
and the By-Laws.
ARTICLE IV
Effect of the Merger on Capital Stock;
Exchange of Certificates
4.1. EFFECT ON CAPITAL STOCK. At the Effective Time, as a result of the
Merger and without any action on the part of the holder of any capital stock of
the Company:
(a) MERGER CONSIDERATION. Each share of the Common Stock, par value
$.10 per share, of the Company (the "SHARES") issued and outstanding immediately
prior to the Effective Time (other than Shares owned by Parent, Merger Sub or
any other direct or indirect subsidiary of Parent (collectively, the "PARENT
COMPANIES") or Shares that are owned by the Company or any direct or indirect
subsidiary of the Company and in each case not held on behalf of third parties
or Shares ("DISSENTING SHARES") that are owned by stockholders ("DISSENTING
STOCKHOLDERS") exercising appraisal rights pursuant to Section 86 of the MBCL
(collectively, "EXCLUDED SHARES")) shall be converted into, and become
exchangeable for (the "MERGER CONSIDERATION"), 0.680 shares (the "EXCHANGE
RATIO") of Common Stock, no par value, of Parent ("PARENT COMMON STOCK");
PROVIDED THAT, if the average of the per share closing prices of Parent Common
Stock as reported on the New York Stock Exchange, Inc. (the "NYSE") composite
transactions reporting system (as reported in the New York City edition of THE
WALL STREET JOURNAL or, if not reported thereby, another authoritative source)
for 20 trading days ending on the third trading day prior to the Stockholders
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Meeting (as defined in Section 6.5) (the "AVERAGE CLOSING PRICE") is less than
$37.50, the Exchange Ratio shall be equal to $25.50 divided by the Average
Closing Price; and (ii) in the event that the Average Closing Price is more than
$41.50, the Exchange Ratio shall be equal to $28.22 divided by the Average
Closing Price. At the Effective Time, all Shares shall no longer be outstanding
and shall be cancelled and retired and shall cease to exist, and each
certificate (a "CERTIFICATE") formerly representing any of such Shares (other
than Excluded Shares) shall thereafter represent only the right to the Merger
Consideration and the right, if any, to receive pursuant to Section 4.2(e) cash
in lieu of fractional shares into which such Shares have been converted pursuant
to this Section 4.1(a) and any distribution or dividend pursuant to Section
4.2(c).
(b) COMPANY OPTIONS. At the Effective Time, all outstanding Company
Options (as defined in Section 6.12(a)) will be assumed by Parent in accordance
with Section 6.12(a).
(c) CANCELLATION OF SHARES. Each Share issued and outstanding
immediately prior to the Effective Time and owned by any of the Parent Companies
or owned by the Company or any direct or indirect subsidiary of the Company
(other than Shares that are in each case owned on behalf of third parties),
shall, by virtue of the Merger and without any action on the part of the holder
thereof, cease to be outstanding, shall be cancelled and retired without payment
of any consideration therefor and shall cease to exist.
(d) MERGER SUB. At the Effective Time, each share of common stock,
without par value, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into one share of common stock of the
Surviving Corporation.
4.2. Exchange of Certificates for Shares.
-----------------------------------
(a) EXCHANGE AGENT. As of the Effective Time, Parent shall deposit,
or shall cause to be deposited, with an exchange agent selected by Parent with
the Company's prior written approval, which shall not be unreasonably withheld
(the "EXCHANGE AGENT"), for the benefit of the holders of Shares, certificates
representing the shares of Parent Common Stock and, after the Effective Time, if
applicable, any cash, dividends or other distributions with respect to the
Parent Common Stock to be issued or paid pursuant to the last sentence of
Section 4.1(a) in exchange for outstanding Shares upon due surrender of the
Certificates (or affidavits of loss in lieu thereof) pursuant to the provisions
of this Article IV (such certificates for shares of Parent Common Stock,
together with the amount of any dividends or other distributions payable with
respect thereto, being hereinafter referred to as the "EXCHANGE FUND").
(b) EXCHANGE PROCEDURES. Promptly after the Effective Time (but in
no event more than five (5) business days thereafter), the Surviving Corporation
shall
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cause the Exchange Agent to mail to each holder of record of Shares (other than
holders of Excluded Shares) (i) a letter of transmittal specifying that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates (or affidavits of loss in lieu thereof)
to the Exchange Agent, such letter of transmittal to be in such form and have
such other provisions as Parent and the Company may reasonably agree, and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for (A) certificates representing shares of Parent Common Stock and (B) any
unpaid dividends and other distributions and cash in lieu of fractional shares.
Subject to Section 4.2(h), upon surrender of a Certificate for cancellation to
the Exchange Agent together with such letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange there for
(x) a certificate representing that number of whole shares of Parent Common
Stock that such holder is entitled to receive pursuant to this Article IV, (y) a
check in the amount (after giving effect to any required tax withholdings) of
(A) any cash in lieu of fractional shares plus (B) any unpaid non-stock
dividends and any other dividends or other distributions that such holder has
the right to receive pursuant to the provisions of this Article IV, and the
Certificate so surrendered shall forthwith be cancelled. No interest will be
paid or accrued on any amount payable upon due surrender of the Certificates. In
the event of a transfer of ownership of Shares that is not registered in the
transfer records of the Company, a certificate representing the proper number of
shares of Parent Common Stock, together with a check for any cash to be paid
upon due surrender of the Certificate and any other dividends or distributions
in respect thereof, may be issued and/or paid to such a transferee if the
Certificate formerly representing such Shares is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and to evidence that any applicable stock transfer taxes have been
paid. If any certificate for shares of Parent Common Stock is to be issued in a
name other than that in which the Certificate surrendered in exchange therefor
is registered, it shall be a condition of such exchange that the Person (as
defined below) requesting such exchange shall pay any transfer or other taxes
required by reason of the issuance of certificates of shares of Parent Common
Stock in a name other than that of the registered holder of the Certificate
surrendered, or shall establish to the satisfaction of Parent or the Exchange
Agent that such tax has been paid or is not applicable.
For the purposes of this Agreement, the term "PERSON" shall mean any
individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity (as defined in Section 5.1(d)) or
other entity of any kind or nature.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES; VOTING. (i)
All shares of Parent Common Stock to be issued pursuant to the Merger shall be
deemed issued and outstanding as of the Effective Time and whenever a dividend
or other
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distribution is declared by Parent in respect of the Parent Common Stock, the
record date for which is at or after the Effective Time, that declaration shall
include dividends or other distributions in respect of all shares issuable
pursuant to this Agreement. No dividends or other distributions in respect of
the Parent Common Stock shall be paid to any holder of any unsurrendered
Certificate until such Certificate is surrendered for exchange in accordance
with this Article IV. Subject to the effect of applicable laws, following
surrender of any such Certificate, there shall be issued and/or paid to the
holder of the certificates representing whole shares of Parent Common Stock
issued in exchange therefor, without interest, (A) at the time of such
surrender, the dividends or other distributions with a record date after the
Effective Time theretofore payable with respect to such whole shares of Parent
Common Stock and not paid and (B) at the appropriate payment date, the dividends
or other distributions payable with respect to such whole shares of Parent
Common Stock with a record date after the Effective Time but with a payment date
subsequent to surrender.
(ii) Holders of unsurrendered Certificates shall be entitled to vote
after the Effective Time at any meeting of Parent stockholders the number of
whole shares of Parent Common Stock represented by such Certificates, regardless
of whether such holders have exchanged their Certificates.
(d) TRANSFERS. After the Effective Time, there shall be no transfers
on the stock transfer books of the Company of the Shares that were outstanding
immediately prior to the Effective Time.
(e) FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, no fractional shares of Parent Common Stock will be issued and any
holder of Shares entitled to receive a fractional share of Parent Common Stock
but for this Section 4.2(e) shall be entitled to receive a cash payment in lieu
thereof, which payment shall represent such holder's proportionate interest in
the shares of Parent Common Stock based on the Average Closing Price.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
and cash specified to be paid in lieu of fractional shares (including the
proceeds of any investments thereof and any Parent Common Stock) that remains
unclaimed by the stockholders of the Company for 180 days after the Effective
Time shall be paid to Parent. Any stockholders of the Company who have not
theretofore complied with this Article IV shall thereafter look only to Parent
for payment of their shares of Parent Common Stock and any cash, dividends and
other distributions in respect of the Parent Common Stock payable and/or
issuable pursuant to Section 4.1 and Section 4.2(c) upon due surrender of their
Certificates (or affidavits of loss in lieu thereof), in each case, without any
interest thereon. Notwithstanding the foregoing, none of Parent, the Surviving
Corporation, the Exchange Agent or any other Person
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shall be liable to any former holder of Shares for any amount properly delivered
to a public official pursuant to applicable abandoned property, escheat or
similar laws.
(g) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by such Person of a
bond in customary amount as indemnity against any claim that may be made against
it with respect to such Certificate, the Exchange Agent will issue in exchange
for such lost, stolen or destroyed Certificate the shares of Parent Common Stock
and any cash payable and any unpaid dividends or other distributions in respect
of Parent Common Stock pursuant to Section 4.2(c) upon due surrender of and
deliverable in respect of the Shares represented by such Certificate pursuant to
this Agreement.
(h) AFFILIATES. Notwithstanding anything herein to the contrary,
Certificates surrendered for exchange by any "affiliate" (as determined pursuant
to Section 6.9) of the Company shall not be exchanged until Parent has received
a written agreement from such Person as provided in Section 6.9 hereof.
4.3. DISSENTERS' RIGHTS. No Dissenting Stockholder shall be entitled to
shares of Parent Common Stock or cash in lieu of fractional shares thereof or
any dividends or other distributions pursuant to this Article IV unless and
until the holder thereof shall have failed to perfect or shall have effectively
withdrawn or lost such holder's right to dissent from the Merger under the MBCL,
and any Dissenting Stockholder shall be entitled to receive only the payment
provided by either Section 89 or Section 92 of the MBCL with respect to Shares
owned by such Dissenting Stockholder. If any Person who otherwise would be
deemed a Dissenting Stockholder shall have failed to properly perfect or shall
have effectively withdrawn or lost the right to dissent with respect to any
Shares, such Shares shall there upon be treated as though such Shares had been
converted into shares of Parent Common Stock pursuant to Section 4.1 hereof. The
Company shall give Parent (i) prompt notice of any written demands for
appraisal, attempted withdrawals of such demands, and any other instruments
served pursuant to applicable law received by the Company relating to
stockholders' rights of appraisal and (ii) the opportunity to direct all
negotiations and proceedings with respect to demand for appraisal under the
MBCL. The Company shall not, except with the prior written consent of Parent,
voluntarily make any payment with respect to any demands for appraisals of
Dissenting Shares, offer to settle or settle any such demands or approve any
withdrawal of any such demands.
4.4. ADJUSTMENTS TO PREVENT DILUTION. In the event that Parent changes
the number of Shares or shares of Parent Common Stock or securities convertible
or exchangeable into or exercisable for Shares or shares of Parent Common Stock
issued and outstanding prior to the Effective Time as a result of a
reclassification, stock split (including a reverse split), stock dividend or
distribution, recapitalization, merger,
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subdivision, issuer tender or exchange offer, or other similar transaction, the
Merger Consideration and the Exchange Ratio shall be equitably adjusted.
ARTICLE V
Representations and Warranties
5.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
in the corresponding sections or subsections of the disclosure letter delivered
to Parent by the Company on or prior to entering into this Agreement (the
"COMPANY DISCLOSURE LETTER"), the Company hereby represents and warrants to
Parent and Merger Sub that:
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the
Company and its Subsidiaries (as defined below) is a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of organization and has all requisite corporate or similar power
and authority to own and operate its properties and assets and to carry on its
business as presently conducted and is qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the ownership or
operation of its properties or conduct of its business requires such
qualification, except where the failure to be so qualified or in good standing,
when taken together with all other such failures, is not reasonably likely to
have a Company Material Adverse Effect (as defined below). The Company has made
available to Parent a complete and correct copy of the Company's and its
Subsidiaries' articles of organization or other similar organizational documents
and by-laws, each as amended to date. The Company's and its Subsidiaries'
certificates of incorporation and by-laws so delivered are in full force and
effect. Section 5.1(a) of the Company Disclosure Letter contains a correct and
complete list of each jurisdiction where the Company and each of its
Subsidiaries is organized and qualified to do business.
As used in this Agreement, the term (i) "SUBSIDIARY" means, with
respect to the Company, Parent or Merger Sub, as the case may be, any entity,
whether incorporated or unincorporated, of which at least a majority of the
securities or ownership interests having by their terms ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions is directly or indirectly owned or controlled by such party or by one
or more of its respective Subsidiaries or by such party and any one or more of
its respective Subsidiaries and (ii) "COMPANY MATERIAL ADVERSE EFFECT" means a
material adverse effect on the financial condition, properties, business or
results of operations of the Company and its Subsidiaries taken as a whole.
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(b) CAPITAL STRUCTURE. The authorized capital stock of the Company
consists of 60,000,000 Shares, of which 20,039,444 Shares were outstanding as of
the close of business on September 27, 1996. All of the outstanding Shares have
been duly authorized and are validly issued, fully paid and nonassessable. The
Company has no Shares reserved for issuance, except that, as of September 27,
1996, there were an aggregate of 3,733,941 Shares reserved for issuance pursuant
to the Company's 1996 Stock Plan, 1996 Stock Bonus Plan for Senior Executives,
Director's Deferred Compensation Plan, 1996 Stock Retainer Plan for Non-employee
Directors, 1993 Employee Stock Purchase Plan, 1987 Stock Option and Appreciation
Right Plan, 1989 Stock Plan, 1994 Stock Plan, 1984 Stock Option and Appreciation
Right Plan, and Savings and Retirement Plan (the "STOCK PLANS"), 4,754,677
Shares reserved for issuance pursuant to the Rights Agreement, dated as of
August 2, 1988, between the Company and The Chase Manhattan Bank, N.A. (the
"RIGHTS AGREEMENT"). The Company Disclosure Letter contains a correct and
complete list of each outstanding option to purchase Shares under the Stock
Plans (each a "COMPANY OPTION"), including the holder, date of grant, exercise
price and number of Shares subject thereto. Each of the outstanding shares of
capital stock or other securities of each of the Company's Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and, except for
directors' qualifying shares, owned by a direct or indirect wholly owned
subsidiary of the Company, free and clear of any lien, pledge, security
interest, claim or other encumbrance. Except as set forth above, there are no
preemptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments to issue or sell any shares of capital stock or
other securities of the Company or any of its Subsidiaries or any securities or
obligations convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, any securities of the Company or any
of its Subsidiaries, and no securities or obligations evidencing such rights are
authorized, issued or outstanding. The Company does not have outstanding any
bonds, debentures, notes or other obligations the holders of which have the
right to vote (or convertible into or exercisable for securities having the
right to vote) with the stockholders of the Company on any matter ("VOTING
DEBT").
(c) CORPORATE AUTHORITY; APPROVAL AND FAIRNESS. (i) The Company has
all requisite corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under this
Agreement and to consummate, subject only to approval of this Agreement by the
holders of two-thirds of the outstanding Shares (the "COMPANY REQUISITE VOTE"),
the Merger. This Agreement is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles (the "BANKRUPTCY AND EQUITY EXCEPTION").
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(ii) The board of directors of the Company (A) has unanimously
approved this Agreement and the Merger and the other transactions contemplated
hereby and (B) has received the opinion of its financial advisors, Xxxxxxx Xxxxx
& Co. to the effect that the Exchange Ratio to be received by the holders of the
Shares in the Merger (other than Parent and its AFFILIATES (as defined in Rule
12b-2 under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT")) is fair to such holders from a financial point of view, a copy of which
opinion has been delivered to Parent.
(d) GOVERNMENTAL FILINGS; NO VIOLATIONS. (i) Other than the filings
and/or notices (A) pursuant to Section 1.3, (B) under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), the Exchange Act
and the Securities Act of 1933, as amended (the "SECURITIES ACT") and (C) to
comply with state securities or "blue-sky" laws, no notices, reports or other
filings are required to be made by the Company with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by
the Company from, any governmental or regulatory authority, agency, commission
or body or other governmental entity ("GOVERNMENTAL ENTITY"), in connection with
the execution and delivery of this Agreement by the Company and the consummation
by the Company of the Merger and the other transactions contemplated hereby,
except those that the failure to make or obtain are not, individually or in the
aggregate, reasonably likely to have a Company Material Adverse Effect or
prevent, materially delay or materially impair the ability of the Company to
consummate transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this Agreement by the
Company do not, and the consummation by the Company of the Merger and the other
transactions contemplated hereby will not, constitute or result in (A) a breach
or violation of, or a default under, the articles of organization or by-laws of
the Company or the comparable governing instruments of any of its Subsidiaries,
(B) a breach or violation of, or a default under, the acceleration of any
obligations or the creation of a lien, pledge, security interest or other
encumbrance on the assets of the Company or any of its Subsidiaries (with or
without notice, lapse of time or both) pursuant to, any agreement, lease,
contract, note, mortgage, indenture, arrangement or other obligation
("CONTRACTS") binding upon the Company or any of its Subsidiaries or any Law (as
defined in Section 5.1(i)) or governmental or non-governmental permit or license
to which the Company or any of its Subsidiaries is subject or (C) any change in
the rights or obligations of any party under any of the Contracts, except, in
the case of clause (B) or (C) above, for any breach, violation, default,
acceleration, creation or change that, individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect or prevent,
materially delay or materially impair the ability of the Company to consummate
the transactions contemplated by this Agreement. Section 5.1(d) of the Company
Disclosure Letter sets forth a correct and complete list of Contracts of the
Company and its Subsidiaries pursuant to which consents or waivers are or may be
required prior to
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consummation of the transactions contemplated by this Agreement, except for
those Contracts where the failure to obtain such waiver or consent is not
reasonably likely to have a Company Material Adverse Effect.
(e) COMPANY REPORTS; FINANCIAL STATEMENTS. The Company has delivered
or made available to Parent each registration statement, report, proxy statement
or information statement prepared by it since December 31, 1995 (the "AUDIT
DATE"), including (i) the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 and (ii) the Company's Quarterly Reports on Form 10-Q
for the periods ended March 31, 1996, and June 30, 1996, each in the form
(including exhibits, annexes and any amendments thereto) filed with the
Securities and Exchange Commission (the "SEC") (collectively, including any such
reports filed subsequent to the date hereof, the "COMPANY REPORTS"). As of their
respective dates, the Company Reports did not, and any Company Reports filed
with the SEC subsequent to the date hereof will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading. Each of the consolidated
balance sheets included in or incorporated by reference into the Company Reports
(including the related notes and schedules) fairly presents, or will fairly
present, the consolidated financial position of the Company and its Subsidiaries
as of its date and each of the consolidated statements of income, shareholders'
equity and cash flows included in or incorporated by reference into the Company
Reports (including any related notes and schedules) fairly presents, or will
fairly present, the results of operations, as the case may be, of the Company
and its Subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to notes and normal year-end adjustments that will not be
material in amount or effect), in each case in accordance with generally
accepted accounting principles ("GAAP") consistently applied during the periods
involved, except as may be noted therein.
(f) ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Company
Reports filed prior to the date hereof, since the Audit Date the Company and its
Subsidiaries have conducted their respective businesses only in, and have not
engaged in any material transaction other than according to, the ordinary and
usual course of such businesses and there has not been (i) any change in the
financial condition, properties, business or results of operations of the
Company and its Subsidiaries or any development or combination of developments
affecting the Company of which the Company's executive officers (within the
meaning of Rule 3b-7 under the Exchange Act) ("EXECUTIVE OFFICERS"), have
knowledge, except those changes, developments or combinations of developments
that, individually or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect; (ii) any material damage, destruction or other
casualty loss with respect to any material asset or property owned, leased or
otherwise used by the Company or any of its Subsidiaries, whether or not covered
by insurance; (iii) any declaration, setting aside
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or payment of any dividend or other distribution in respect of the capital stock
of the Company, except for dividends or other distributions on its capital stock
publicly announced prior to the date hereof; or (iv) any change by the Company
in accounting principles, practices or methods. Since the Audit Date, except as
provided for herein or as disclosed in the Company Reports filed prior to the
date hereof, there has not been any increase in the compensation payable or that
could become payable by the Company or any of its Subsidiaries to officers or
any amendment of any of the Compensation and Benefit Plans (as defined below)
other than increases or amendments in the ordinary course.
(g) LITIGATION AND LIABILITIES. Except as disclosed in the Company
Reports filed prior to the date hereof, there are no (i) civil, criminal or
administrative actions, suits, claims, hearings, investigations or proceedings
pending or, to the knowledge of the Executive Officers of the Company,
threatened against the Company or any of its Affiliates or (ii) obligations or
liabilities, whether or not accrued, contingent or otherwise and whether or not
required to be disclosed, or any other facts or circumstances of which the
Executive Officers of the Company have knowledge that could result in any claims
against, or obligations or liabilities of, the Company or any of its Affiliates,
except for those that are not, individually or in the aggregate, reasonably
likely to have a Company Material Adverse Effect or prevent or materially burden
or materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
(h) Employee Benefits.
-----------------
(i) A copy of each bonus, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, employment, termination, severance,
compensation, medical, health or other plan, agreement, policy or arrangement
that covers employees, directors, former employees or former directors of the
Company and its Subsidiaries (other than plans maintained or sponsored by
non-U.S. governmental entities) (the "COMPENSATION AND BENEFIT PLANS") and any
trust agreement or insurance contract forming a part of such Compensation and
Benefit Plans has been provided or made available to Parent prior to the date
hereof. The Compensation and Benefit Plans are listed in Section 5.1(h) of the
Company Disclosure Letter and any "change of control" or similar provisions
therein are specifically identified in Section 5.1(h) of the Company Disclosure
Letter.
(ii) All Compensation and Benefit Plans are in substantial compliance
with all applicable law, including the Code and the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). Each Compensation and Benefit Plan
that is an "employee pension benefit plan" within the meaning of Section 3(2) of
ERISA (a "PENSION PLAN") and that is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service (the
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18
"IRS"), and the Company is not aware of any circumstances likely to result in
revocation of any such favorable determination letter. There is no pending or,
to the knowledge of the Executive Officers of the Company or the officer of the
Company that is in charge of the day-to-day operations of the Company's Human
Resources Department, threatened material litigation relating to the
Compensation and Benefit Plans. Neither the Company nor any Subsidiary has
engaged in a transaction with respect to any Compensation and Benefit Plan that,
assuming the taxable period of such transaction expired as of the date hereof,
would subject the Company or any of its Subsidiaries to a material tax or
penalty imposed by either Section 4975 of the Code or Section 502 of ERISA.
(iii) As of the date hereof, no liability under Subtitle C or D of
Title IV of ERISA has been or is expected to be incurred by the Company or any
Subsidiary with respect to any ongoing, frozen or terminated "single-employer
plan," within the meaning of Section 4001(a) (15) of ERISA, currently or
formerly maintained by any of them, or the single-employer plan of any entity
which is considered one employer with the Company under Section 4001 of ERISA or
Section 414 of the Code (an "ERISA AFFILIATE"). The Company and its Subsidiaries
have not contributed, or been obligated to contribute, to a multiemployer plan
under Subtitle E of Title IV of ERISA at any time since September 26, 1980. No
notice of a "reportable event," within the meaning of Section 4043 of ERISA for
which the 30-day reporting requirement has not been waived, has been required to
be filed for any Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof or will be required to be filed in connection
with the transaction contemplated by this Agreement.
(iv) All contributions required to be made under the terms of any
Compensation and Benefit Plan as of the date hereof have been timely made or
have been reflected on the most recent consolidated balance sheet filed or
incorporated by reference in the Company Reports prior to the date hereof.
Neither any Pension Plan nor any single employer plan of an ERISA Affiliate has
an "accumulated funding deficiency" (whether or not waived) within the meaning
of Section 412 of the Code or Section 302 of ERISA. Neither the Company nor its
Subsidiaries has provided, or is required to provide, security to any Pension
Plan or to any single-employer plan of an ERISA Affiliate pursuant to Section
401(a) (29) of the Code.
(v) Under each Pension Plan which is a single employer plan, as of
the last day of the most recent plan year ended prior to the date hereof, the
actuarially determined present value of all "benefit liabilities," within the
meaning of Section 4001(a)(16) of ERISA (as determined on the basis of the
actuarial assumptions contained in the Pension Plan's most recent actuarial
valuation), did not exceed the then current value of the assets of such Pension
Plan, and there has been no material change in the financial condition of such
Pension Plan since the last day of the most recent plan year.
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19
(vi) Neither the Company nor its Subsidiaries have any obligations
for retiree health and life benefits under any Compensation and Benefit Plan
(other than benefits required to be continued under Part 6 of Subtitle B of
Title I of ERISA or applicable state or foreign law), except as set forth in the
Company Disclosure Letter. The Company or its Subsidiaries may amend or
terminate any such plan under the terms of such plan at any time without
incurring any material liability thereunder.
(vii) The consummation of the Merger and the other transactions
contemplated by this Agreement will not (x) entitle any employees of the Company
or its Subsidiaries to severance pay, (y) accelerate the time of payment or
vesting or trigger any payment of compensation or benefits under, increase the
amount payable or trigger any other material obligation pursuant to, any of the
Compensation or Benefit Plans or (z) result in any breach or violation of, or a
default under, any of the Compensation and Benefit Plans.
(viii) All Compensation and Benefit Plans covering current or former
non-U.S. employees or former employees of the Company and its Subsidiaries
comply in all material respects with applicable local law. The Company and its
Subsidiaries have no material unfunded liabilities with respect to any Pension
Plan that covers such non-U.S. employees.
(i) COMPLIANCE WITH LAWS; PERMITS. Except as set forth in the
Company Reports filed prior to the date hereof, the businesses of each of the
Company and its Subsidiaries have not been, and are not being, conducted in
violation of any law, ordinance, regulation, judgment, order, decree,
arbitration award, license or permit of any Governmental Entity (collectively,
"LAWS"), except for violations that, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect or prevent or
materially burden or materially impair the ability of the Company to consummate
the transactions contemplated by this Agreement. To the knowledge of the
officers of the Company, no material change is required in the Company's or any
of its Subsidiaries' processes, properties or procedures in connection with any
such Laws, and the Company has not received any notice or communication of any
material noncompliance with any such Laws that has not been cured as of the date
hereof. The Company and its Subsidiaries each has all permits, licenses,
trademarks, service marks, franchises, variances, exemptions, orders and other
governmental authorizations, consents and approvals necessary to conduct its
business as presently conducted except those the absence of which are not,
individually or in the aggregate, reasonably likely to have a Company Material
Adverse Effect or prevent or materially burden or materially impair the ability
of the Company to consummate the Merger and the other transactions contemplated
by this Agreement.
(j) TAKEOVER STATUTES. No "fair price," "moratorium," "control
share acquisition" or other similar anti-takeover statute or regulation
(including Chapters
-14-
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110C and 110D of the General Laws of Massachusetts) (each a "TAKEOVER STATUTE")
or any applicable anti-takeover provision in the Company's articles of
organization and by-laws is, or at the Effective Time will be, applicable to the
Company, the Shares, the Merger or the other transactions contemplated by this
Agreement.
(k) ENVIRONMENTAL MATTERS. Except as would not be reasonably likely
to result in a Company Material Adverse Effect, to the knowledge of the officers
of the Company and its Subsidiaries and the Company's present Director of
Environmental, Health and Safety: (i) the Company and its Subsidiaries are in
compliance with all applicable Environmental Laws (as defined below); (ii) the
properties currently owned or operated by the Company (including soils,
groundwater, surface water, buildings or other structures) are not contaminated
with any Hazardous Substances (as defined below) to such an extent that under
applicable Environmental Laws they represent a current and significant threat to
human health or the environment; (iii) the properties formerly owned or operated
by the Company or any of its Subsidiaries were not contaminated with Hazardous
Substances on or prior to the period of ownership or operation by the Company or
any of its Subsidiaries to such an extent that under applicable Environmental
Laws they represent a current and significant threat to human health or the
environment; (iv) neither the Company nor its Subsidiaries are presently subject
to liability for any Hazardous Substance disposal or contamination on or under
any third party property; (v) neither the Company nor any Subsidiary has
received any notice, demand, letter, claim or request for information alleging
that the Company or any of its Subsidiaries may be in violation of or liable
under any Environmental Law; (vi) neither the Company nor any of its
Subsidiaries is subject to any orders, decrees, injunctions or other
arrangements with any Governmental Entity relating to liability under any
Environmental Law or relating to Hazardous Substances; (vii) there are no
circumstances or conditions involving the Company or any of its Subsidiaries
that could reasonably be expected to result in any claims, liability,
investigations, costs or restrictions on the ownership, use, or transfer of any
property of the Company pursuant to any Environmental Law and that represent a
current and significant threat to human health or the environment; and (viii)
the Company and its Subsidiaries have made reasonable efforts to provide
material non-privileged information (e.g. information presently known to the
company which sets forth the Company's or the Subsidiaries' present
understanding of the nature and scope of any liability that may reasonably be
incurred by the Company pursuant to an Environmental Law) to respond to data
requests furnished by Parent.
As used herein, the term "ENVIRONMENTAL LAW" means any federal, state,
local or foreign law, regulation, order, decree, permit, authorization, judicial
or administrative decision, common law or agency requirement relating to: (A)
the protection, investigation or restoration of the environment, health and
safety, or natural resources, (B) the handling, use, presence, disposal, release
or threatened
-15-
21
release of any Hazardous Substance or (C) noise, odor, wetlands, pollution or
contamination of the environment.
As used herein, the term "HAZARDOUS SUBSTANCE" means any substance that
is: (A) listed, classified or regulated pursuant to any Environmental Law; (B)
any petroleum product or by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyls, radioactive
materials or radon; or (C) any other substance which is the subject of
regulatory action by any Government Authority pursuant to any Environmental Law.
(1) ACCOUNTING AND TAX MATTERS. As of the date hereof, neither the
Company nor, to the knowledge of the Executive Officers of the Company and the
officer of the Company that is in charge of the day-to-day operations of the
Company's Tax Department, any of its Affiliates has taken or agreed to take any
action, nor do the officers of the Company have any knowledge of any fact or
circumstance, that would prevent Parent from accounting for the business
combination to be effected by the Merger as a "pooling-of-interests" or prevent
the Merger from qualifying as a "reorganization" within the meaning of Section
368(a) of the Code.
(m) TAXES. Except for matters that would not be reasonably likely to
have, individually or in the aggregate, a Company Material Adverse Effect, the
Company and each of its Subsidiaries (i) have prepared in good faith and duly
and timely filed (taking into account any extension of time within which to
file) all Tax Returns (as defined below) required to be filed or delivered by
any of them and all such filed or delivered Tax Returns are complete and
accurate in all material respects; (ii) have paid all Taxes (as defined below)
that are required to be paid or that the Company or any of its Subsidiaries are
obligated to withhold from amounts owing to any employee, creditor or third
party, except with respect to matters contested in good faith; and (iii) have
not waived any statute of limitations with respect to Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency. As of the date
hereof, there are not pending or, to the knowledge of the Executive Officers of
the Company and the officer of the Company that is in charge of the day-to-day
operations of the Company's Tax Department threatened in writing, any audits,
examinations, investigations or other proceedings in respect of Taxes or Tax
matters. There are not, to the knowledge of the Executive Officers of the
Company and the officer of the Company that is in charge of the day-to-day
operations of the Company's Tax Department, any unresolved questions or claims
concerning the Company's or any of its Subsidiaries' Tax liability that are
reasonably likely to have a Company Material Adverse Effect. The Company has
made available to Purchaser true and correct copies of the United States federal
income Tax Return filed by the Company and its Subsidiaries for each of the
fiscal years ended December 31, 1993, 1994 and 1995. Neither the Company nor any
of its Subsidiaries has any liability with respect to income, franchise or
similar Taxes that accrued on or before June 30,
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22
1996 in excess of the amounts accrued in respect thereto that are reflected in
the financial statements included in the Company Reports filed on or prior to
the date hereof.
As used in this Agreement, (i) the term "Tax" (including, with
correlative meaning, the terms "Taxes, and "TAXABLE") includes all federal,
state, local and foreign income, profits, franchise, gross receipts,
environmental, customs duty, capital stock, severances, stamp, payroll, sales,
employment, unemployment, disability, use, property, withholding, excise,
production, value added, occupancy and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts and any interest in respect of such penalties and
additions, and (ii) the term "TAX RETURN" includes all returns and reports
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be supplied to a Tax authority or any person
relating to Taxes.
(n) LABOR MATTERS. Neither the Company nor any of its Subsidiaries is
a party to or otherwise bound by any collective bargaining agreement, contract
or other agreement or understanding with a labor union or labor organization,
nor is the Company or any of its Subsidiaries the subject of any material
proceeding asserting that the Company or any of its Subsidiaries has committed
an unfair labor practice or is seeking to compel it to bargain with any labor
union or labor organization nor is there pending or, to the knowledge of the
Executive Officers of the Company following a reasonable inquiry, threatened,
nor has there been for the past five years, any labor strike, dispute, walkout,
work stoppage, slow-down or lockout involving the Company or any of its
Subsidiaries, nor has there been for the past five years any loss of employment
(within the meaning of the Worker Adjustment and Retraining Act ("WARN ACT")) of
any employees of the Company and its Subsidiaries for which the Company has not
given proper notice or made the required payments to such employees pursuant to
the WARN Act. The Company has previously made available to Parent correct and
complete copies of all labor and collective bargaining agreements, if any, to
which the Company or any of its Subsidiaries is party or by which any of them
are otherwise bound.
(o) INSURANCE. All material fire and casualty, general liability,
business interruption, product liability, and sprinkler and water damage
insurance policies maintained by the Company or any of its Subsidiaries are with
reputable insurance carriers, provide, in the reasonable judgment of the
Company, full and adequate coverage for all normal risks incident to the
business of the Company and its Subsidiaries and their respective properties and
assets.
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23
(p) Intellectual Property.
---------------------
(i) The Company and/or each of its Subsidiaries owns, or is
licensed or otherwise possesses legally enforceable rights to use all patents,
trademarks, trade names, trade dress, service marks, copyrights, and any
applications therefor, technology, know-how, trade secrets, computer software
programs or applications, and tangible or intangible information or materials
whether proprietary or not that are used in the business of the Company and its
Subsidiaries as currently conducted, except for any such failures to own, be
licensed or possess that, individually or in the aggregate, are not reasonably
likely to have a Company Material Adverse Effect.
(ii) Except as disclosed in the Company Reports or as is not
reasonably likely to have a Company Material Adverse Effect:
(A) the Company is not, nor will it be as a result of the
execution and delivery of this Agreement or the performance of its
obligations hereunder, in violation of any licenses, sublicenses and
other agreements as to which the Company is a party and pursuant to
which the Company is authorized to use any third-party patents,
trademarks, service marks, copyrights, trade secrets or other
proprietary rights or confidential information and any specific or
general know-how or technology associated therewith ("THIRD-PARTY
INTELLECTUAL PROPERTY RIGHTS");
(B) no claims with respect to the patents, registered and
unregistered trademarks and service marks, registered copyrights, trade
names, trade dress and any applications therefor, trade secrets,
know-how and any other proprietary or confidential information owned by
the Company or any of its subsidiaries (the "COMPANY INTELLECTUAL
PROPERTY RIGHTS"), or Third Party Intellectual Property Rights to the
extent arising out of any use, reproduction, or distribution of such
Third Party Intellectual Property Rights by or through the Company or
any of its subsidiaries, are currently pending or, to the knowledge of
the officers of the Company, are asserted or threatened by any person;
(C) the Company and its officers do not know of any grounds
for any bona fide claims (i) to the effect that the manufacture, sale,
licensing or use of any product as now made, used, sold or licensed or
proposed for manufacture, use, sale or license by Company or any of its
Subsidiaries, infringes or violates any agreement pertaining to any
copyright, patent, trademark, service xxxx, or trade secret, trade
dress, or any other proprietary right or confidential information
belonging to a third party; (ii) against the use by the Company or any
of its Subsidiaries, of any trademarks, service marks, trade names,
trade secrets, copyrights, patents, technology, know-how, or computer
software programs and applications, trade dress, or any other
-18-
24
proprietary right or confidential information used in the business of
the Company or any of its subsidiaries as currently conducted; (iii)
challenging the ownership, validity, or effectiveness of any of the
Company Intellectual Property Rights; or (iv) challenging the license
or legally enforceable right to use or transfer of the Third Party
Intellectual Rights by the Company or any of its Subsidiaries;
(D) to the knowledge of the officers of the Company, all
patents, trademarks, service marks, copyrights, trade names, trade
dress, trade secrets and all other proprietary or confidential
information held or owned by the Company are valid, enforceable and
subsisting; and
(E) to the knowledge of the officers, agents and employees of
the Company, there is no unauthorized use, infringement or
misappropriation of any kind of any of the Company Intellectual
Property Rights by any third party, including any employee or former
employee of the Company or any of its Subsidiaries.
(q) RIGHTS PLAN. (i) The Company has taken all action necessary to
ensure that the Rights Agreement will expire immediately prior to the Effective
Time and that the execution of this Agreement and any agreements between the
Company and Parent or Merger Subsidiary and the consummation of the Merger and
the other transactions contemplated hereby do not and will not cause either a
Distribution Date or Stock Acquisition Date to occur (each, as defined in the
Rights Agreement).
(ii) The Company has taken all necessary action with respect to all of
the outstanding Rights so that, as of immediately prior to the Effective Time,
(A) neither the Company nor Parent will have any obligations under the Rights or
the Rights Agreement and (B) the holders of the Rights will have no rights under
the Rights or the Rights Agreement.
(r) PRODUCT LIABILITY AND RECALLS. (i) Except as disclosed in the
Company Reports, the Executive Officers of the Company do not know of any claim,
or the basis of any claim, against the Company or any of its Subsidiaries for
injury to person or property of employees or any third parties suffered as a
result of the sale of any product or performance of any service by the Company
or any of its subsidiaries, including claims arising out of the defective or
unsafe nature of its products or services, which is reasonably likely to have a
Company Material Adverse Effect.
(ii) Except as disclosed in the Company Reports, there is no pending
or, to the knowledge of the Executive Officers of the Company, threatened recall
or investigation of any product sold by the Company, which recall or
investigation is reasonably likely to have a Company Material Adverse Effect.
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25
(s) ACCOUNTS RECEIVABLE. The accounts receivable of the Company and
its Subsidiaries as reflected in the most recent financial statements contained
in the Company Reports, to the extent uncollected on the date hereof, and the
accounts receivable reflected on the books of and its Subsidiaries are valid and
existing and represent monies due, and the Company has made reserves it
reasonably considers adequate for receivables not collectible in the ordinary
course of business, and (subject to the aforesaid reserves) to the knowledge of
the Executive Officers of the Company, are subject to no refunds or other
adjustments and to no defenses, rights of setoff, assignments, restrictions,
encumbrances or conditions enforceable by third parties on or affecting any
thereof, except for such refunds, adjustments, defenses, rights of setoff,
assignments, restrictions, encumbrances or conditions as could not reasonably be
expected to have a Company Material Adverse Effect.
(t) INVENTORY. The inventories of the Company and its Subsidiaries as
reflected in the most recent financial statements contained in the Company
Reports, or acquired by the Company or any of its Subsidiaries after the date
thereof, (i) are carried at an amount not in excess of the lower of cost or net
realizable value, and (ii) do not include any inventory which is obsolete,
surplus or not usable or saleable in the lawful or ordinary course of business
of the Company and its Subsidiaries as heretofore conducted, in each case net of
reserves provided therefor except, in each case, as is not reasonably likely to
have a Company Material Adverse Effect.
(u) WARRANTIES. All products manufactured or sold by the Company or
any of its Subsidiaries have been manufactured or sold in substantial conformity
with applicable contractual commitments and all express or implied warranties
except for such non-substantial conformity as is not reasonably likely to have a
Company Material Adverse Effect.
(v) BROKERS AND FINDERS. Neither the Company nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders fees in connection with
the Merger or the other transactions contemplated in this Agreement except that
the Company has employed Xxxxxxx Xxxxx & Co. as its financial advisor, the
arrangements with which have been disclosed to Parent prior to the date hereof.
5.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. Except as
set forth in the corresponding sections or subsections of the disclosure letter
delivered to the Company by Parent on or prior to entering into this Agreement
(the "PARENT DISCLOSURE LETTER"), Parent and Merger Sub each hereby represent
and warrant to the Company that:
(a) CAPITALIZATION OF MERGER SUB. The authorized capital stock of
Merger Sub consists of 1,000 shares of Common Stock, without par value, all of
which are validly issued and outstanding. All of the issued and outstanding
capital stock of
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Merger Sub is, and at the Effective Time will be, owned by Parent, and there are
(i) no other shares of capital stock or other voting securities of Merger Sub,
(ii) no securities of Merger Sub convertible into or exchangeable for shares of
capital stock or voting securities of Merger Sub and (iii) no options or other
rights to acquire from Merger Sub, and no obligations of Merger Sub to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Merger Sub. Merger Sub
has not conducted any business prior to the date hereof and has no, and prior to
the Effective Time will have no, assets, liabilities or obligations of any
nature other than those incident to its formation and pursuant to this Agreement
and the Merger and the other transactions contemplated by this Agreement.
(b) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Parent and its
Subsidiaries each is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
requisite corporate or similar power and authority to own and operate its
properties and assets and to carry on its business as presently conducted and is
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the ownership or operation of its properties or conduct
of its business requires such qualification, except where the failure to be so
qualified or in such good standing, when taken together with all other such
failures, is not reasonably likely to have a Parent Material Adverse Effect (as
defined below). Parent has made available to the Company a complete and correct
copy of Parent's charter and by-laws, as amended to the date hereof. Parent's
charter and by-laws so delivered are in full force and effect.
The term "PARENT MATERIAL ADVERSE EFFECT" means a material adverse
effect on the financial condition, properties, business or results of operations
of the Parent and its Subsidiaries taken as a whole.
(c) CAPITAL STRUCTURE. The authorized capital stock of Parent
consists of 80,000,000 shares of Parent Common Stock, of which 40,425,747 shares
were outstanding as of the close of business on September 28, 1996, and 500,000
shares of Preferred Stock, no par value (the "PARENT PREFERRED SHARES"), of
which no shares were outstanding as of the close of business on September 28,
1996. All of the outstanding Parent Common Stock and Parent Preferred Shares
have been duly authorized and are validly issued, fully paid and nonassessable.
Parent has no Parent Common Stock or Parent Preferred Shares reserved for
issuance, except that, as of September 28, 1996, there were an aggregate of
703,315 shares of Parent Common Stock reserved for issuance pursuant to the
Parent 1985 Stock Option Plan, 1993 Management Stock Ownership Plan and
Restricted Stock Plan for Non-employee Directors (the "PARENT STOCK PLANS").
Each of the outstanding shares of capital stock of each of Parent's Subsidiaries
is duly authorized, validly issued, fully paid and nonassessable and, except for
directors' qualifying shares, owned by a direct or indirect wholly owned
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subsidiary of Parent, free and clear of any lien, pledge, security interest,
claim or other encumbrance. Except as set forth above, there are no preemptive
or other outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments to issue or to sell any shares of capital stock or
other securities of Parent or any of its Subsidiaries or any securities or
obligations convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, any securities of the Parent or any
of its Subsidiaries, and no securities or obligation evidencing such rights are
authorized, issued or outstanding. Parent does not have outstanding any bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or convertible into or exercisable for securities having the right to
vote) with the stockholders of Parent on any matter ("PARENT VOTING DEBT").
(d) Corporate Authority.
-------------------
(i) Parent and Merger Sub each has all requisite corporate power and
authority and each has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and to consummate,
subject only to any stockholder approval necessary to approve this Agreement and
to permit the issuance of Parent Common Stock required to be issued pursuant to
Article IV (the "PARENT REQUISITE VOTE"), the Merger. This Agreement is a valid
and binding agreement of Parent and Merger Sub, enforceable against each of
Parent and Merger Sub in accordance with its terms, subject to the Bankruptcy
and Equity Exception.
(ii) Prior to the Effective Time, Parent will have taken all necessary
action to permit it to issue the number of shares of Parent Common Stock
required to be issued pursuant to Article IV. The Parent Common Stock, when
issued, will be validly issued, fully paid and nonassessable, and no stockholder
of Parent will have any preemptive right of subscription or purchase in respect
thereof. The Parent Common Stock, when issued, will be registered under the
Securities Act and the Exchange Act and registered or exempt from registration
under any applicable state securities or "blue sky" laws.
(e) Governmental Filings; No Violations.
-----------------------------------
(i) Other than the filings and/or notices (A) pursuant to Section
1.3, (B) under the HSR Act, the Securities Act and the Exchange Act, (C) to
comply with state securities or "blue sky" laws and (D) required to be made with
the NYSE no notices, reports or other filings are required to be made by Parent
or Merger Sub with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by Parent or Merger Sub from, any
Governmental Entity, in connection with the execution and delivery of this
Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub
of the Merger and the other transactions contemplated hereby, except those that
the failure to make or obtain are not,
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individually or in the aggregate, reasonably likely to have a Parent Material
Adverse Effect or prevent, materially delay or materially impair the ability of
Parent or Merger Sub to consummate the transactions contemplated by this
Agreement.
(ii) The execution, delivery and performance of this Agreement by
Parent and Merger Sub do not, and the consummation by Parent and Merger Sub of
the Merger and the other transactions contemplated hereby will not, constitute
or result in a breach or violation of, or a default under, the certificate or
by-laws of Parent and Merger Sub or the comparable governing instruments of any
of its Subsidiaries.
(f) PARENT REPORTS; FINANCIAL STATEMENTS. Parent has delivered or
made available to the Company each registration statement, report, proxy
statement or information statement prepared by it since December 31, 1995 (the
"PARENT AUDIT DATE"), including (i) Parent's Annual Report on Form 10-K for the
year ended December 31, 1995 and (ii) Parent's or Parent's predecessor's
Quarterly Reports on Form 10-Q for the periods ended March 31, 1996 and June 30,
1996, each in the form (including exhibits and any amendments thereto) filed
with the SEC (collectively, the "PARENT REPORTS"). As of their respective dates,
the Parent Reports did not, and any Parent Reports filed with the SEC subsequent
to the date hereof will not, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances in which they were
made, not misleading. Each of the consolidated balance sheets included in or
incorporated by reference into the Parent Reports (including the related notes
and schedules) fairly presents, or will fairly present, the consolidated
financial position of Parent and its Subsidiaries as of its date and each of the
consolidated statements of earnings, shareholders' equity and cash flows
included in or incorporated by reference into the Parent Reports (including any
related notes and schedules) fairly presents, or will fairly present, the
results of operations, as the case may be, of Parent and its Subsidiaries for
the periods set forth therein (subject, in the case of unaudited statements, to
notes and normal year-end audit adjustments that will not be material in amount
or effect), in each case in accordance with GAAP consistently applied during the
periods involved, except as may be noted therein.
(g) ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Parent
Reports filed prior to the date hereof, since the Parent Audit Date Parent and
its Subsidiaries have conducted their respective businesses only in, and have
not engaged in any material transaction other than according to, the ordinary
and usual course of such businesses and there has not been (i) any change in the
financial condition, properties, business or results of operations of Parent and
its Subsidiaries or any development or combination of developments affecting
Parent of which Parent's Executive Officers have knowledge, except those
changes, developments or combinations of developments that, individually or in
the aggregate, are not reasonably likely to result in a Parent Material Adverse
Effect; (ii) any material damage, destruction or other casualty loss with
respect to any material asset or
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property owned, leased or otherwise used by Parent or any of its Subsidiaries,
whether or not covered by insurance; (iii) any change by Parent in accounting
principles, practices or methods; or (iv) any declaration, setting aside or
payment of any dividend or other distribution in respect of the capital stock of
Parent, except for dividends or other distributions on its capital stock
publicly announced prior to the date hereof.
(h) ACCOUNTING AND TAX MATTERS. Neither Parent nor, to the knowledge
of the Executive Officers of the Parent, any of its Affiliates has taken or
agreed to take any action, nor do the officers of Parent have any knowledge of
any fact or circumstance, that would prevent Parent from accounting for the
business combination to be effected by the Merger as a "pooling-of-interests" or
prevent the Merger from qualifying as a "reorganization" within the meaning of
Section 368(a) of the Code.
(i) BROKERS AND FINDERS. Neither Parent nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders fees in connection with
the Merger or the other transactions contemplated by this Agreement, except that
Parent has employed Xxxxxx Xxxxxxx & Co. Incorporated and Xxxxxxxxx, Lufkin and
Xxxxxxxx as its financial advisors, the arrangements with which have been
disclosed in writing to the Company prior to the date hereof.
(j) ENVIRONMENTAL MATTERS. Except as would not be reasonably likely
to result in a Parent Material Adverse Effect, to the knowledge of the officers
of Parent and its Subsidiaries: (i) Parent's and its Subsidiaries' current
operating facilities are in compliance with applicable Environmental Laws; (ii)
neither Parent's nor its Subsidiaries' current or former operating facilities
are subject to any order by any governmental entity relating to an obligation to
incur response costs under CERCLA or analogous state environmental cleanup law
due to a release of Hazardous Substances to the environment for which Parent or
its Subsidiaries are being held potentially responsible; (iii) neither Parent
nor its Subsidiaries have received written notices of potential responsibility,
requests for information, orders, or claims relating to releases of Hazardous
Substances to the environment.
ARTICLE VI
Covenants
6.1. COMPANY INTERIM OPERATIONS. The Company covenants and agrees as to
itself and its Subsidiaries that, after the date hereof and prior to the
Effective Time (unless Parent shall otherwise approve in writing, which approval
shall not be unreasonably withheld or delayed, and except as otherwise expressly
contemplated by this Agreement):
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(a) the business of it and its Subsidiaries shall be conducted in the
ordinary and usual course and, to the extent consistent therewith, it and its
Subsidiaries shall use their respective reasonable best efforts to preserve its
business organization substantially intact, to keep available the services of
those of its present officers, employees and consultants that are integral to
the operation of its business as presently conducted and to maintain its
existing relations and goodwill with customers, suppliers, distributors,
creditors and lessors;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any
capital stock owned by it in any of its Subsidiaries; (ii) amend its articles of
organization or by-laws or amend, modify or terminate the Rights Agreement;
(iii) split, combine or reclassify its outstanding shares of capital stock; (iv)
declare, set aside or pay any dividend payable in cash, stock or property in
respect of any capital stock other than dividends from its direct or indirect
wholly owned Subsidiaries and other than regular quarterly cash dividends not in
excess of $.04 per Share; or (v) repurchase, redeem or otherwise acquire, except
in connection with the Stock Plans or permit any of its Subsidiaries to purchase
or otherwise acquire, any shares of its capital stock or any securities
convertible into or exchangeable or exercisable for any shares of its capital
stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell,
pledge, dispose of or encumber any shares of, or securities convertible into or
exchangeable or exercisable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares of its capital stock of any class or
any Voting Debt or any other property or assets (other than Shares issuable
pursuant to options or other rights outstanding on the date hereof under the
Stock Plans and except for shares to be issued pursuant to the Company's 1993
Employee Stock Purchase Plan, as amended); (ii) other than in the ordinary and
usual course of business or in amounts less than $250,000 individually or
$2,000,000 in the aggregate transfer, lease, license, guarantee, sell, mortgage,
pledge, dispose of or encumber any other property or assets (including capital
stock of any of its Subsidiaries), or incur or modify any material indebtedness
or other liability; or (iii) other than in the ordinary and usual course of
business make any commitments for, make or authorize any capital expenditures
other than in amounts less than $250,000 individually and $2,000,000 in the
aggregate or, by any means, make any acquisition of, or investment in, assets or
stock of any other Person or entity;
(d) neither it nor any of its Subsidiaries shall terminate,
establish, adopt, enter into, make any new grants or awards under, amend or
otherwise modify, any Compensation and Benefit Plans or increase the salary or
wage of any employees except increases occurring in the ordinary and usual
course of business (which shall include normal periodic performance reviews and
related compensation increases);
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(e) neither it nor any of its Subsidiaries shall settle or compromise
any material claims or litigation or, except in the ordinary and usual course of
business, modify, amend or terminate any of its material Contracts or waive,
release or assign any material rights or claims;
(f) neither it nor any of its Subsidiaries shall make any Tax
election or permit any insurance policy naming it as a beneficiary or
loss-payable payee to be cancelled or terminated except in the ordinary and
usual course of business;
(g) neither it nor any of its Subsidiaries shall take any action or
omit to take any action that would prevent the Merger from qualifying for
"pooling of interests" accounting treatment or as a "reorganization" within the
meaning of Section 368(a) of the Code or that would cause any of its
representations and warranties herein to become untrue in any material respect;
and
(h) neither it nor any of its Subsidiaries will authorize or enter
into an agreement to do any of the foregoing.
6.2. PARENT INTERIM OPERATIONS. Parent covenants and agrees as to
itself and its Subsidiaries that, after the date hereof and prior to the
Effective Time (unless the Company shall otherwise approve in writing, which
approval shall not be unreasonably withheld or delayed, and except as otherwise
expressly contemplated by this Agreement):
(a) the business of it and its Subsidiaries shall be conducted in the
ordinary and usual course and, to the extent consistent therewith, it and its
Subsidiaries shall use their respective reasonable best efforts to preserve its
business organization substantially intact, to keep available the services of
those of its present officers, employees and consultants that are integral to
the operation of its business as presently conducted and to maintain its
relations and goodwill with customers, suppliers, distributors, creditors and
lessors; and
(b) it shall not (i) amend its charter or bylaws, or (ii) declare,
set aside or pay any dividend payable in cash, stock or property in respect of
any capital stock except that a wholly owned Subsidiary of Parent may declare
and pay a dividend to its parent, and except that Parent may declare and pay
dividends consistent with past practice.
6.3. ACQUISITION PROPOSALS. The Company agrees that neither it nor any
of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall direct and use its best efforts to cause
its and its Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, (i) initiate, solicit, encourage
or otherwise facilitate any inquiries or the making of any proposal
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or offer with respect to a merger, reorganization, share exchange, consolidation
or similar transaction involving, or any purchase of all or any significant
portion of the assets or any equity securities of, it or any of its Subsidiaries
(any such proposal or offer being hereinafter referred to as an "ACQUISITION
PROPOSAL") or (ii) engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any Person
relating to an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal; PROVIDED, HOWEVER, that
nothing contained in this Agreement shall prevent the Company or its board of
directors from (A) complying with Rule 14e-2 promulgated under the Exchange Act
with regard to an Acquisition Proposal; (B) providing information in response to
a request there for by a Person who has made an unsolicited bona fide written
Acquisition Proposal if the board of directors receives from the Person so
requesting such information an executed confidentiality agreement on terms
substantially similar to those contained in the Confidentiality Agreements (as
defined in Section 9.7); (C) engaging in any negotiations or discussions with
any Person who has made an unsolicited bona fide written Acquisition Proposal;
or (D) recommending such an Acquisition Proposal to the stockholders of the
Company, if and only to the extent that, in each such case referred to in clause
(B), (C) or (D) above, (i) the board of directors of the Company determines in
good faith after consultation with outside legal counsel that such action is
necessary in order for its directors to comply with their respective fiduciary
duties under applicable law and, in the case referred to in clause (D) above,
(ii) the board of directors of the Company believes in good faith (after
consultation with its financial advisor) that such Acquisition Proposal is
reasonably likely to be consummated, and would, if consummated, result in a
transaction more favorable to the Company's stockholders than the transaction
contemplated by this Agreement (any such more favorable Acquisition Proposal
being referred to in this Agreement as a "SUPERIOR PROPOSAL"). The Company
agrees that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. The Company agrees that it will take the
necessary steps to promptly inform the individuals or entities referred to in
the first sentence hereof of the obligations undertaken in this Section 6.3 and
in the Confidentiality Agreements. The Company agrees that it will notify Parent
promptly, but in no event more than 24 hours, after any such inquiries,
proposals or offers are received by, any such information is requested from, or
any such negotiations or discussions are sought to be initiated or continued
with, any of its representatives and thereafter shall keep Parent informed, on a
current basis, on the status of any such negotiations or discussions (but not
including the identity of any third party or the terms and conditions of any
such offer or proposal). The Company also agrees that it will promptly request
each Person that has heretofore executed a confidentiality agreement in
connection with its consideration of acquiring it or any of its Subsidiaries to
return all confidential information heretofore furnished to such Person by or on
behalf of it or any of its Subsidiaries.
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6.4. INFORMATION SUPPLIED. The Company and Parent each agrees, as to
itself and its Subsidiaries, that none of the information supplied or to be
supplied by it or its Subsidiaries for inclusion or incorporation by reference
in (i) the Registration Statement on Form S-4 to be filed with the SEC by Parent
in connection with the issuance of shares of Parent Common Stock in the Merger
(including the joint proxy statement and prospectus (the "PROSPECTUS/PROXY
STATEMENT") constituting a part thereof) (the "S-4 REGISTRATION STATEMENT")
will, at the time the S-4 Registration Statement becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and (ii) the Prospectus/Proxy Statement and any amendment or
supplement thereto will, at the date of mailing to stockholders and at the times
of the meetings of stockholders of the Company and Parent to be held in
connection with the Merger, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
6.5. STOCKHOLDERS MEETINGS. The Company will take, in accordance with
applicable law and its articles of organization and by-laws, all action
necessary to convene a meeting of holders of Shares (the "STOCKHOLDERS MEETING")
as promptly as practicable after the S-4 Registration Statement is declared
effective to consider and vote upon the approval of this Agreement. Parent will
take, in accordance with its charter and by-laws, all action necessary to
convene a meeting of holders of Parent Common Stock as promptly as practicable
after the S-4 Registration Statement is declared effective to consider and vote
upon the approval of this Agreement and approval of the issuance of Parent
Common Stock in the Merger. Subject to fiduciary obligations under applicable
law, each of the Company's and Parent's board of directors shall recommend such
approval and shall take all lawful action to solicit such approval.
6.6. Filings; Other Actions: Notification.
------------------------------------
(a) The Company and Parent shall promptly prepare and file with the
SEC the Prospectus/Proxy Statement, and Parent shall prepare and file with the
SEC the S-4 Registration Statement as promptly as practicable. The Company and
Parent each shall use its reasonable best efforts to have the S-4 Registration
Statement declared effective under the Securities Act as promptly as practicable
after such filing, and promptly thereafter mail the Prospectus/Proxy Statement
to the respective stockholders of each of the Company and Parent. Parent shall
also use its reasonable best efforts to obtain prior to the effective date of
the S-4 Registration Statement all necessary state securities law or "blue sky"
permits and approvals required in connection with the Merger and to consummate
the other transactions contemplated by this Agreement and will pay all expenses
incident thereto.
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(b) The Company and Parent each shall use its best efforts to cause
to be delivered to the other party and its directors a letter of its independent
auditors, dated (i) the date on which the S-4 Registration Statement shall
become effective and (ii) the Closing Date, and addressed to the other party and
its directors, in form and substance customary for "comfort" letters delivered
by independent public accountants in connection with registration statements
similar to the S-4 Registration Statement.
(c) The Company and Parent shall cooperate with each other and use
(and shall cause their respective Subsidiaries to use) their respective
reasonable best efforts to take or cause to be taken all actions, and do or
cause to be done all things, necessary, proper or advisable under this Agreement
and applicable Laws to consummate and make effective the Merger and the other
transactions contemplated by this Agreement as soon as practicable, including
preparing and filing as promptly as practicable all documentation to effect all
necessary applications, notices, petitions, filings and other documents and to
obtain as promptly as practicable all permits, consents, approvals and
authorizations necessary or advisable to be obtained from any third party and/or
any Governmental Entity in order to consummate the Merger or any of the other
transactions contemplated by this Agreement; PROVIDED, HOWEVER, that nothing in
this Section 6.6 shall require, or be construed to require, Parent to proffer
to, or agree to, sell or hold separate and agree to sell, before or after the
Effective Time, any assets, businesses, or interest in any assets or businesses
of Parent, the Company or any of their respective Affiliates (or to consent to
any sale, or agreement to sell, by the Company of any of its assets or
businesses) or to agree to any material changes or restriction in the operations
of any such assets or businesses. Subject to applicable Laws relating to the
exchange of information, Parent and the Company shall have the right to review
in advance, and to the extent practicable each will consult the other on, all
the information relating to Parent or the Company, as the case may be, and any
of their respective Subsidiaries, that appear in any filing made with, or
written materials submitted to, any third party and/or any Governmental Entity
in connection with the Merger and the other transactions contemplated by this
Agreement. In exercising the foregoing right, each of the Company and Parent
shall act reasonably and as promptly as practicable.
(d) The Company and Parent each shall, upon request by the other,
furnish the other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may be necessary
or advisable in connection with the Prospectus/Proxy Statement, the S-4
Registration Statement or any other statement, filing, notice or application
made by or on behalf of Parent, the Company or any of their respective
Subsidiaries to any third party and/or any Governmental Entity in connection
with the Merger and the transactions contemplated by this Agreement.
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(e) The Company and Parent each shall keep the other apprised of the
status of matters relating to completion of the transactions contemplated
hereby, including promptly furnishing the other with copies of notice or other
communications received by Parent or the Company, as the case may be, or any of
its Subsidiaries, from any third party and/or any Governmental Entity with
respect to the Merger and the other transactions contemplated by this Agreement.
The Company and Parent each shall give prompt notice to the other of any change
that is reasonably likely to result in a Company Material Adverse Effect or
Parent Material Adverse Effect, respectively.
6.7. TAXATION AND ACCOUNTING. Subject to Section 6.3, neither Parent
nor the Company shall take or cause to be taken any action, whether before or
after the Effective Time, that would disqualify the Merger as a "pooling of
interests" for accounting purposes or as a "reorganization" within the meaning
of Section 368(a) of the Code.
6.8. ACCESS. Upon reasonable notice, and except as may otherwise be
required by applicable law, the Company and Parent each shall (and shall cause
its Subsidiaries to) afford the other's officers, employees, counsel,
accountants and other authorized representatives ("REPRESENTATIVES") access,
during normal business hours throughout the period prior to the Effective Time,
to its properties, books, contracts and records and, during such period, each
shall (and shall cause its Subsidiaries to) furnish promptly to the other all
information concerning its business, properties and personnel as may reasonably
be requested, PROVIDED that no investigation pursuant to this Section shall
affect or be deemed to modify any representation or warranty made by the
Company, Parent or Merger Sub, and PROVIDED, FURTHER. that the foregoing shall
not require the Company or Parent to permit any inspection, or to disclose any
information, that in the reasonable judgment of the Company or Parent, as the
case may be, would result in the disclosure of any trade secrets of third
parties or violate any of its obligations with respect to confidentiality if the
Company or Parent, as the case may be, shall have used reasonable best efforts
to obtain the consent of such third party to such inspection or disclosure. All
requests for information made pursuant to this Section shall be directed to an
executive officer of the Company or Parent, as the case may be, or such Person
as may be designated by either of its officers, as the case may be. All such
information shall be governed by the terms of the Confidentiality Agreements.
Furthermore with respect to any and all access to properties for environmental
review and diligence purposes, Parent shall be granted access to any facility
currently owned or operated by the Company to perform a Phase I assessment so
long as such assessment is presumptively non-intrusive in nature, the site
visits and discussions are performed in collaboration with the Director of
Environmental Health and Safety or his designee, schedule and times for such
assessments are mutually agreed upon in advance, that Parent or its contractors
will be accompanied by the Company representatives at all times, and no
notification or discussions of environmental matters are initiated with
governmental agencies or
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third parties without the prior notice to and agreement by the Company. The
Phase I reports shall remain the property of Parent. However if Parent, based
upon the conclusions in the Phase I report, desires to perform intrusive
testing, Parent shall present such request and the supporting written
justification to the Company and both parties shall use reasonable best efforts
to mutually agree upon the need, scope, and nature of any such intrusive
investigation. Any intrusive investigation shall be under the supervision of the
Company and all results of any intrusive investigation shall be immediately
shared with the Company. Any and all costs of any investigation, including any
intrusive testing, shall be borne entirely by Parent.
6.9. AFFILIATES. (i) Prior to the Stockholders Meeting, the Company
shall deliver to Parent a list of names and addresses of those Persons who will
be, in the opinion of the Company, as of the time of the Stockholders Meeting
referred to in Section 6.5, "affiliates" of the Company within the meaning of
Rule 145 under the Securities Act and for the purposes of applicable
interpretations regarding the pooling-of-interests method of accounting. The
Company shall provide to Parent such information and documents as Parent shall
reasonably request for purposes of reviewing such list and shall notify Parent
in writing regarding any change in the identity of its affiliates prior to the
Closing Date. The Company shall exercise its best efforts to deliver or cause to
be delivered to Parent, prior to the date of the Stockholders Meeting, from each
affiliate of the Company identified in the foregoing list, a letter dated as of
the date of the Stockholders Meeting substantially in the form attached as
Exhibit A-1 (the "AFFILIATES LETTER"). Parent shall not be required to maintain
the effectiveness of the S-4 Registration Statement or any other registration
statement under the Securities Act for the purposes of resale of Parent Common
Stock by such affiliates received in the Merger and the certificates
representing Parent Common Stock received by such affiliates shall bear a
customary legend regarding applicable Securities Act restrictions and the
provisions of this Section. Prior to the Effective Time Parent shall amend and
supplement its letter and the Company shall use its best efforts to cause each
additional affiliate to deliver an Affiliates Letter.
(ii) Prior to the date of the Stockholders Meeting, Parent shall
deliver to the Company a list of names and addresses of those Persons who will
be, in the opinion of Parent, at the time of the Stockholders Meeting referred
to in Section 6.5, "affiliates" of Parent for the purposes of applicable
interpretations regarding the pooling-of-interests method of accounting. Parent
shall provide to the Company such information and documents as the Company shall
reasonably request for purposes of reviewing such list and shall notify the
Company in writing regarding any change in the identity of its affiliates prior
to the Closing Date. Parent shall exercise its best efforts to deliver or cause
to be delivered to the Company, prior to the date of the Stockholders Meeting,
from each of such affiliates of Parent identified in the foregoing list, a
letter dated as of the date of the Stockholders Meeting substantially in the
form attached as Exhibit A-2 (the "POOLING AFFILIATES LETTER").
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6.10. STOCK EXCHANGE LISTING AND DE-LISTING. Parent shall use its best
efforts to cause the shares of Parent Common Stock to be issued in the Merger to
be approved for listing on the NYSE subject to official notice of issuance,
prior to the Closing Date. The Company shall use its best efforts to cause the
Shares to be de-listed from the NYSE and de-registered under the Exchange Act as
soon as practicable following the Effective Time.
6.11. PUBLICITY. The initial press release shall be a joint press
release and thereafter the Company and Parent each shall consult with each other
prior to issuing any press releases or otherwise making public announcements
with respect to the Merger and the other transactions contemplated by this
Agreement and prior to making any filings with any third party and/or any
Governmental Entity (including any national securities exchange) with respect
thereto, except as may be required by law or by obligations pursuant to any
listing agreement with or rules of any national securities exchange.
6.12. Benefits.
--------
(a) Stock Options.
-------------
(i) At the Effective Time, each outstanding option to purchase
Shares (a "COMPANY OPTION") under the Stock Plans, whether vested or unvested,
shall be deemed to constitute an option to acquire, on the same terms and
conditions as were applicable under such Company Option, the same number of
shares of Parent Common Stock equal to the result of multiplying (w) the number
of shares subject to a Company Option by (y) the Exchange Ratio, as and if
adjusted, as the holder of such Company Option would have been entitled to
receive pursuant to the Merger had such holder exercised such option in full
immediately prior to the Effective Time (rounded down to the nearest whole
number), at a price per share (rounded up to the nearest whole cent) equal to
(y) the exercise price per Share for the Shares otherwise purchasable pursuant
to such Company Option divided by (z) the Exchange Ratio, as and if adjusted;
PROVIDED, HOWEVER, that in the case of any Company Option which is an incentive
stock option under Section 422 of the Code, the option price, the number of
shares purchasable pursuant to such option and the terms and conditions of
exercise of such option shall be determined in accordance with the foregoing,
subject to such adjustments as are necessary in order to satisfy the
requirements of Section 424(a) of the Code. At or prior to the Effective Time,
the Company shall make all necessary arrangements with respect to the Stock
Plans to permit the assumption of the unexercised Company Options by Parent
pursuant to this Section.
(ii) Effective at the Effective Time, Parent shall assume each
Company Option in accordance with the terms of the Stock Plan under which it was
issued and the stock option agreement by which it is evidenced. At or prior to
the Effective Time,
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Parent shall take all corporate action necessary to reserve for issuance a
sufficient number of shares of Parent Common Stock for delivery upon exercise of
Company Options assumed by it in accordance with this Section. As soon as
practicable after the Effective Time, Parent shall file a registration statement
on Form S-3 or Form S-8, as the case may be (or any successor or other
appropriate forms), or another appropriate form with respect to the Parent
Common Stock subject to such Company Options, and shall use its best efforts to
maintain the effectiveness of such registration statements (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as such Company Options remain outstanding.
(b) ELECTION TO PARENT'S BOARD OF DIRECTORS. At the Effective Time,
Parent shall promptly increase the size of its board of directors in order to
enable Messrs. Xxxxxx XxXxxxxxx and Xxxx Xxxxxxxxx to be appointed to Parent's
board of directors and for at least one year after the next annual meeting of
the shareholders of Parent, subject to fiduciary obligations under applicable
law, shall use its best efforts to cause Messrs. XxXxxxxxx and Xxxxxxxxx to be
elected as directors of Parent by the shareholders of Parent.
(c) OTHER EMPLOYEE BENEFITS. Parent agrees that, during the period
commencing at the Effective Time and ending on the first anniversary thereof,
the employees of the Company will continue to be provided with benefits under
employee benefit plans (other than stock option or other plans involving the
potential issuance of securities of the Company or Parent) which in the
aggregate are substantially comparable to those currently provided by Parent to
employees of Parent holding comparable positions. Employees of the Company will
have the rights set forth in Section 6.11 with respect to conversion of their
Company Options into options to purchase Parent Common Stock and will have the
same rights as existing employees of Parent to participate in Parent's stock
option plans in accordance with the terms thereof but subject to appropriate
transitional provisions (i) to adjust to Parent's annual grant cycle and (ii) to
take into account grants made by the Company in the twelve months prior to the
Effective Time. Parent will honor without modification all employee (or former
employee) benefit obligations under the Compensation and Benefit Plans accrued
as of the Effective Time and all employee severance plans (or policies) and
employment or severance agreements that were entered into by the Company or
adopted by the Board of Directors of the Company prior to the date hereof and as
specifically identified in Schedule 6.12(c).
6.13. EXPENSES. The Surviving Corporation shall pay all charges and
expenses, including those of the Exchange Agent, in connection with the
transactions contemplated in Article IV, and Parent shall reimburse the
Surviving Corporation for such charges and expenses. Except as otherwise
provided in Section 8.5(b), whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the Merger and the
other transactions contemplated by this Agreement shall be paid by the party
incurring such expense, except that expenses
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incurred in connection with the filing fee for the S-4 Registration Statement
and printing and mailing the Prospectus/Proxy Statement and the S-4 Registration
Statement shall be shared equally by Parent and the Company.
6.14. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. (a) From and
after the Effective Time, Parent agrees that it will indemnify and hold harmless
each present and former director and officer of the Company (when acting in such
capacity) determined as of the Effective Time (the "INDEMNIFIED PARTIES"),
against any costs or expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages or liabilities (collectively, "COSTS") incurred
in connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of matters
existing or occurring at or prior to the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time, to the fullest extent that the
Company would have been permitted under Massachusetts law and its articles of
organization or by-laws in effect on the date hereof to indemnify such Person
(and Parent shall also advance expenses as incurred to the fullest extent
permitted under applicable law PROVIDED the Person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately determined
that such Person is not entitled to indemnification); and PROVIDED, FURTHER,
that any determination required to be made with respect to whether an officer's
or director's conduct complies with the standards set forth under Massachusetts
law and the Company's by-laws shall be made by independent counsel selected by
the Surviving Corporation.
(b) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 6.14, upon learning of any such claim, action,
suit, proceeding or investigation, shall promptly notify Parent thereof. In the
event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) Parent or the Surviving
Corporation shall have the right to assume the defense thereof and Parent shall
not be liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnified Parties
in connection with the defense thereof, (ii) the Indemnified Parties will
cooperate in the defense of any such matter and (iii) Parent shall not be liable
for any settlement effected without its prior written consent; and PROVIDED,
FURTHER, that Parent shall not have any obligation hereunder to any Indemnified
Party if and when a court of competent jurisdiction shall ultimately determine,
and such determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
law.
(c) The Surviving Corporation shall maintain the Company's existing
officers' and directors' liability insurance ("D&O INSURANCE") for a period of
six years after the Effective Time so long as the annual premium therefor is not
in excess of the last annual premium paid prior to the date hereof, subject to
customary increases in
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accordance with industry practice (the "CURRENT PREMIUM"); PROVIDED, HOWEVER,
that if the existing D&O Insurance expires, is terminated or cancelled during
such six-year period, the Surviving Corporation will use its reasonable efforts
to obtain as much D&O Insurance as can be obtained for the remainder of such
period for a premium not in excess (on an annualized basis) of 1.50 times the
Current Premium.
(d) If the Surviving Corporation or any of its successors or assigns
(i) shall consolidate with or merge into any other corporation or entity and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) shall transfer all or substantially all of its
properties and assets to any individual, corporation or other entity, then and
in each such case, proper provisions shall be made so that the successors and
assigns of the Surviving Corporation shall assume all of the obligations set
forth in this Section.
(e) The provisions of this Section are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties, their
heirs and their representatives.
6.15. OTHER ACTIONS BY THE COMPANY AND PARENT.
(a) RIGHTS. Prior to the Effective Time, the board of directors of
the Company shall take all necessary action to ensure that the Rights Agreement
shall expire by its terms, effective immediately prior to the Effective Time.
(b) TAKEOVER STATUTE. If any Takeover Statute is or may become
applicable to the Merger or the other transactions contemplated by this
Agreement, the Company and its board of directors shall grant such approvals and
take such actions as are necessary so that such transactions may be consummated
as promptly as practicable on the terms contemplated by this Agreement or by the
Merger and otherwise act to eliminate or minimize the effects of such statute or
regulation on such transactions.
(c) DIVIDENDS. The Company shall coordinate with Parent the
declaration, setting of record dates and payment dates of dividends on Shares so
that holders of Shares do not receive dividends on both Shares and Parent Common
Stock received in the Merger in respect of any calendar quarter or fail to
receive a dividend on either Shares or Parent Common Stock received in the
Merger in respect of any calendar quarter.
6.16. PARENT VOTE. Parent shall vote (or consent with respect to) or
cause to be voted (or a consent to be given with respect to) any Shares and any
shares of common stock of Merger Sub beneficially owned by it or any of its
Affiliates or with respect to which it or any of its Affiliates has the power
(by agreement, proxy or otherwise) to cause to be voted (or to provide a
consent), in favor of the approval of
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this Agreement at any meeting of stockholders of the Company or Merger Sub,
respectively, at which this Agreement shall be submitted for approval and at all
adjournments or postponements thereof (or, if applicable, by any action of
stockholders of either the Company or Merger Sub by consent in lieu of a
meeting).
ARTICLE VII
Conditions
7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver at or prior to the Effective Time of each of the
following conditions:
(a) STOCKHOLDER APPROVAL. This Agreement shall have been duly
approved by holders of Shares constituting the Company Requisite Vote and have
been duly approved by the sole stockholder of Merger Sub in accordance with
applicable law and the certificate of incorporation and bylaws of each such
corporation, and the approval of this Agreement and the issuance of Parent
Common Stock pursuant to the Merger shall have been duly approved by the holders
of Parent Common Stock constituting the Parent Requisite Vote.
(b) NYSE LISTING. The shares of Parent Common Stock issuable to the
Company stockholders pursuant to this Agreement shall have been authorized for
listing on the NYSE upon official notice of issuance.
(c) REGULATORY CONSENTS. The waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated and, other than the filing provided for in Section 1.3, all filings
required to be made prior to the Effective Time by the Company or Parent or any
of their respective Subsidiaries with, and all consents, approvals and
authorizations required to be obtained prior to the Effective Time by the
Company or Parent or any of their respective Subsidiaries from, any Governmental
Entity (collectively, "GOVERNMENTAL CONSENTS") in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby by the Company, Parent and Merger Sub shall have been made
or obtained (as the case may be)
(d) LITIGATION. No court or Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) that is in effect and restrains, enjoins or
otherwise prohibits consummation of the transactions contemplated by this
Agreement (collectively, an "ORDER"), and no Governmental Entity or any other
Person shall have
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instituted any proceeding or threatened to institute any proceeding seeking any
such Order.
(e) S-4. The S-4 Registration Statement shall have become effective
under the Securities Act and no stop order suspending the effectiveness of the
S-4 Registration Statement shall have been issued and no proceedings for that
purpose shall have been initiated or be threatened by the SEC.
(f) BLUE SKY APPROVALS. Parent shall have received all state
securities and "blue sky" permits and other authorizations necessary to
consummate the transactions contemplated hereby.
7.2. CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB. The
obligations of Parent and Merger Sub to effect the Merger are also subject to
the satisfaction or waiver by Parent prior to the Effective Time of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
in all material respects as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date (except to the extent any such
representation or warranty expressly speaks as of an earlier date), and Parent
shall have received a certificate signed on behalf of the Company by an
executive officer of the Company to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Parent shall have
received a certificate signed on behalf of the Company by an executive officer
of the Company to such effect.
(c) CONSENTS UNDER AGREEMENTS. The Company shall have obtained the
consent or approval of each Person whose consent or approval shall be required
under any material Contract to which the Company or any of its Subsidiaries is a
party, except those for which the failure to obtain such consent or approval,
individually or in the aggregate, is not reasonably likely to have a Company
Material Adverse Effect or is not reasonably likely to materially adversely
affect the ability of the Company to consummate the transactions contemplated by
this Agreement.
(d) TAX OPINION. Parent shall have received the opinion of Xxxxxxxx &
Xxxxxxxx, special counsel to Parent, dated the Closing Date, to the effect that
the Merger will be treated for Federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code, and that each of Parent,
Merger Sub and the Company will be a party to that reorganization within the
meaning of Section 368(b) of the Code. In rendering such opinion, Xxxxxxxx &
Xxxxxxxx may require and rely
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upon representations and covenants including those contained in certificates of
officers of Parent, Company and Merger Sub and others.
(e) DISSENTING SHARES. The aggregate amount of Dissenting Shares,
together with "tainted treasury shares" and other items which would violate the
provisions required to account for the transaction as a "pooling of interests,"
in the aggregate shall not exceed 10% of the total number of outstanding Shares
at the Effective Time.
(f) RIGHTS AGREEMENT. The Rights shall have expired.
(g) AFFILIATES LETTERS. Parent shall have received an Affiliates
Letter from each Person identified as an affiliate of the Company pursuant to
Section 6.9.
(h) ACCOUNTANT LETTERS. Parent shall have received, in form and
substance reasonably satisfactory to Parent, from KPMG Peat Marwick LLP the
"comfort" letter described in Section 6.6(b) as well as a letter to the effect
that the Merger will qualify for "pooling-of-interests" accounting treatment and
shall have received a copy of the "pooling-of-interests" letter referred to in
Section 7.3(d).
7.3. CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of the
Company to effect the Merger is also subject to the satisfaction or waiver by
the Company prior to the Effective Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Parent and Merger Sub set forth in this Agreement shall be true
and correct in all material respects as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing Date (except to the
extent any such representation and warranty expressly speaks as of an earlier
date) and the Company shall have received a certificate signed on behalf of
Parent by an executive officer of Parent and Merger Sub to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND MERGER SUB. Each of
Parent and Merger Sub shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date, and the Company shall have received a certificate signed on
behalf of Parent and Merger Sub by an executive officer of Parent to such
effect.
(c) TAX OPINION. The Company shall have received the opinion of Xxxx
and Xxxx, counsel to the Company, dated the Closing Date, to the effect that the
Merger will be treated for Federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code, and that each of Parent,
Merger Sub and the Company will be a party to that reorganization within the
meaning of Section 368(b) of the Code. In rendering such opinion, Xxxx and Xxxx
may require and rely upon
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representations and covenants of officers of Parent, Company and Merger Sub and
others.
(d) ACCOUNTANT LETTERS. The Company shall have received from Deloitte
& Touche the "comfort" letter described in Section 6.6(b) as well as a letter to
the effect that, with respect to matters relating to the Company, the Merger
will qualify for "pooling-of-interests" accounting treatment and shall have
received a copy of the "pooling-of-interests" letter referred to in Section
7.2(h).
ARTICLE VIII
Termination
8.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approval by stockholders of the Company and Parent referred
to in Section 7.1(a), by mutual written consent of the Company, Parent and
Merger Sub, by action of their respective boards of directors.
8.2. TERMINATION BY EITHER PARENT OR THE COMPANY. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the board of directors of either Parent or the Company if (i)
the Merger shall not have been consummated by March 31, 1997, whether such date
is before or after the date of approval by the stockholders of the Company or
Parent (the "TERMINATION DATE"), (ii) the approval of the Company's stockholders
required by Section 7.1(a) shall not have been obtained at a meeting duly
convened therefor or at any adjournment or postponement thereof, (iii) the
approval of Parent's stockholders as required by Section 7.1(a) shall not have
been obtained at a meeting duly convened therefor or (iv) any Order permanently
restraining, enjoining or otherwise prohibiting the Merger shall become final
and non-appealable (whether before or after the approval by the stockholders of
the Company or Parent); PROVIDED, that the right to terminate this Agreement
pursuant to clause (i) above shall not be available to any party that has
breached in any material respect its obligations under this Agreement in any
manner that shall have proximately contributed to the occurrence of the failure
of the Merger to be consummated.
8.3. TERMINATION BY THE COMPANY. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approval by stockholders of the Company referred to in
Section 7.1(a), by action of the board of directors of the Company:
(a) if (i) the Company is not in material breach of any of the terms
of this Agreement, (ii) the Board of Directors of the Company authorizes the
Company, subject to complying with the terms of this Agreement, to enter into a
binding
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written agreement concerning a transaction that constitutes a Superior Proposal
and the Company notifies Parent in writing that it intends to enter into such an
agreement and (notwithstanding the penultimate sentence of Section 6.3) sets
forth in such notice the material terms of such proposed transaction and (iii)
the Company prior to such termination pays to Parent in immediately available
funds any fees required to be paid pursuant to Section 8.5. The Company agrees
(i) that it will not enter into a binding agreement referred to in clause (ii)
above until at least the twenty-four hours after it has provided the notice to
Parent required thereby and (ii) to notify Parent promptly if its intention to
enter into a written agreement referred to in its notification shall change at
any time after giving such notification;
(b) if (i) the Board of Directors of Parent shall have withdrawn or
adversely modified its approval or recommendation of this Agreement or (ii)
there has been a material breach by Parent or Merger Sub of any representation,
warranty, covenant or agreement contained in this Agreement that is not curable
or, if curable, is not cured within 30 days after written notice of such breach
is given by the Company to the party committing such breach.
8.4. TERMINATION BY PARENT. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, before or after
the approval by the stockholders of Parent referred to in Section 7.1(a), by
action of the board of directors of Parent:
(a) if (i) the board of directors of the Company shall have withdrawn
or adversely modified its approval or recommendation of this Agreement or (ii)
there has been a material breach by the Company of any representation, warranty,
covenant or agreement contained in this Agreement that is not curable or, if
curable, is not cured within 30 days after written notice of such breach is
given by Parent to the party committing such breach; or
(b) if the Average Closing Price is below $32.00.
8.5. EFFECT OF TERMINATION AND ABANDONMENT.
(a) In the event of termination of this Agreement and the abandonment
of the Merger pursuant to this Article VIII, this Agreement (other than as set
forth in Section 9.1) shall become void and of no effect with no liability of
any party hereto (or any of its directors, officers, employees, agents, legal
and financial advisors or other representatives); PROVIDED, HOWEVER, except as
otherwise provided herein, no such termination shall relieve any party hereto of
any liability or damages resulting from any breach of this Agreement.
(b) In the event that (i) an Acquisition Proposal shall have been
made to the Company or its stockholders or any Person shall have publicly
announced an
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intention (whether or not conditional) to make an Acquisition Proposal with
respect to the Company and thereafter this Agreement is terminated pursuant to
Section 8.2(ii) or Section 8.4(a) (i) and, in any such case, within nine (9)
months following such termination, (x) the Company enters into an agreement with
respect to an Acquisition Proposal with any person or entity other than Parent
(such person being hereinafter referred to as an "OTHER ACQUIROR") or (y) an
Other Acquiror shall have become the beneficial owner (as such term is defined
in Rule 13d-3 of the Exchange Act) of a majority of the outstanding shares of
capital stock entitled to vote in the election of directors of the Company (each
such transaction set forth in clause (x) and (y) above being hereinafter
referred to as an "OTHER TRANSACTION"), in either case at a per Share price of
$25.50 or more (the "MINIMUM PRICE"); it being understood that to the extent
that securities of an Other Acquiror are paid in an Other Transaction, for
purposes of calculating the per Share price, the value of the securities of such
Other Acquiror to be paid in such Other Transaction shall be calculated based on
the closing market price of such securities on the trading day next preceding
the date of the public announcement of such Other Transaction; PROVIDED, THAT,
Parent is not in material breach of this Agreement; PROVIDED, FURTHER, THAT, in
the event that the Company changes the number of Shares issued and outstanding
prior to the end of such period commencing nine (9) months after such
termination as a result of a reclassification, stock split (including a reverse
split), stock dividend or distribution, recapitalization, merger, subdivision,
issuer tender offer or exchange offer, or other similar transaction, or pays any
cash dividend other than regular cash dividends not in excess of $.04 per Share,
the Minimum Price shall be equitably adjusted, then the Company shall within two
business days after the occurrence of an Other Transaction pay Parent a
termination fee of $15 million (the "TERMINATION FEE") and shall promptly, but
in no event later than two business days after being notified of such by Parent,
pay all of the documented out-of-pocket charges and expenses, including those of
the Exchange Agent, incurred by Parent or Merger Sub in connection with this
Agreement and the transactions contemplated by this Agreement (together, the
"PARENT EXPENSES") up to a maximum amount of $1,500,000, in each case payable by
wire transfer of same day funds. In addition, if this Agreement is terminated by
the Company pursuant to Section 8.3(a), then the Company shall promptly, but in
no event later than two business days after the date of such termination, pay
Parent the Termination Fee and shall promptly, but in no event later than two
business days after being notified of such by Parent, pay all of the Parent
Expenses up to a maximum amount of $1,500,000 in each case payable by wire
transfer of same day funds. The Company acknowledges that the agreements
contained in this Section 8.5(b) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Parent and
Merger Sub would not enter into this Agreement; accordingly, if the Company
fails to promptly pay the amount due pursuant to this Section 8.5(b), and, in
order to obtain such payment, Parent or Merger Sub commences a suit which
results in a judgment against the Company for the fee set forth in this
paragraph (b), the Company shall pay to Parent or Merger Sub its costs and
expenses (including attorneys' fees) in connection with such suit,
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together with interest on the amount of the fee at the prime rate of Citibank,
N.A. in effect on the date such payment was required to be made.
ARTICLE IX
Miscellaneous and General
9.1. SURVIVAL. This Article IX and the agreements of the Company,
Parent and Merger Sub contained in Sections 6.7 (Taxation and Accounting), 6.12
(Benefits), 6.13 (Expenses) and 6.14 (Indemnification; Directors' and Officers'
Insurance) shall survive the consummation of the Merger. This Article IX, the
agreements of the Company, Parent and Merger Sub contained in Section 6.13
(Expenses), Section 8.5 (Effect of Termination and Abandonment) and the
Confidentiality Agreements shall survive the termination of this Agreement. All
other representations, warranties, agreements and covenants in this Agreement
shall not survive the consummation of the Merger or the termination of this
Agreement.
9.2. MODIFICATION OR AMENDMENT. Subject to the provisions of the
applicable law, at any time prior to the Effective Time, the parties hereto may
modify or amend this Agreement, by written agreement executed and delivered by
duly authorized officers of the respective parties.
9.3. WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law.
9.4. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
9.5. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS
SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW
OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
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THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.5.
9.6. NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
nationally recognized overnight courier service, or by facsimile:
if to Parent or Merger Sub
--------------------------
Xxxxxx & Xxxxx Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: President
fax: (000) 000-0000
with a copy to Xxxx X. Xxxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
fax: (000) 000-0000
if to the Company
-----------------
Xxxxx Inc.
00 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
fax: (000) 000-0000
with a copy to Xxxxxx X. Xxxxx, Esq.,
Xxxx and Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
fax: (000) 000-0000.
-43-
49
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above. Any notice or communication
delivered in person shall be deemed effective on delivery. Any notice or
communication sent by facsimile shall be deemed effective on the first business
day on which such notice or communication is received. Any notice or
communication sent by registered or certified mail shall be deemed effective as
of the fifth business day after which such notice or communication was mailed
following the day in which such notice or communication was mailed.
9.7. ENTIRE AGREEMENT. This Agreement (including any exhibits hereto),
the Company Disclosure Letter, the Parent Disclosure Letter and the
Confidentiality Agreements, dated September 6, 1996, between Parent and the
Company and dated September 21, 1996 between Parent and Company (the
"CONFIDENTIALITY AGREEMENTS") constitute the entire agreement, and supersede all
other prior agreements, understandings, representations and warranties both
written and oral, among the parties, with respect to the subject matter hereof.
EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT, NEITHER PARENT AND MERGER SUB NOR THE COMPANY MAKES
ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER
REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH
RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR
THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH
RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
9.8. NO THIRD PARTY BENEFICIARIES. Except as provided in Section 6.14
(Indemnification; Directors' and Officers' Insurance), this Agreement is not
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
9.9. OBLIGATIONS OF PARENT AND OF THE COMPANY. Whenever this Agreement
requires a Subsidiary of Parent to take any action, such requirement shall be
deemed to include an undertaking on the part of Parent to cause such Subsidiary
to take such action. Whenever this Agreement requires a Subsidiary of the
Company to take any action, such requirement shall be deemed to include an
undertaking on the part of the Company to cause such Subsidiary to take such
action and, after the Effective Time, on the part of the Surviving Corporation
to cause such Subsidiary to take such action.
9.10. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the
-44-
50
validity or enforceability or the other provisions hereof. If any provision of
this Agreement, or the application thereof to any Person or any circumstance, is
invalid or unenforceable, (a) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision
and (b) the remainder of this Agreement and the application of such provision to
other Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.
9.11. INTERPRETATION. The table of contents and headings herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Where a reference in this Agreement is made to a Section or Exhibit, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
9.12. ASSIGNMENT. This Agreement shall not be assignable by operation
of law or otherwise; PROVIDED, HOWEVER, that Parent may designate, by written
notice to the Company, another wholly owned direct or indirect subsidiary to be
a Constituent Corporation in lieu of Merger Sub, in the event of which, all
references herein to Merger Sub shall be deemed references to such other
subsidiary, except that all representations and warranties made herein with
respect to Merger Sub as of the date of this Agreement shall be deemed
representations and warranties made with respect to such other subsidiary as of
the date of such designation.
-45-
51
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
written above.
XXXXX INC.
By: /S/ XXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President & COO
By: /S/ XXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Treasurer
XXXXXX & XXXXX CORPORATION
By: /S/ XXXXX XXXXXXXXXX
-------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President - General
Counsel
By: /S/ XXXX X. XXXXX
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President - Finance
and Treasurer
EG ACQUISITIONS CORP.
By: /S/ XXXXX XXXXXXXXXX
-------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President - General
Counsel
By: /S/ XXXX X. XXXXX
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President - Finance
and Xxxxxxxxx
-00-
00
XXXXXXX X-0
______________, 199_
Xxxxxx & Xxxxx Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
I have been advised that as of the date hereof, I may be deemed to be
an "affiliate" of Xxxxx Inc., a Massachusetts corporation (the "Company"), as
that term (i) is defined for purposes of paragraphs (c) and (d) of Rule 145 of
the Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), or (ii) used in and for purposes of Accounting
Series Releases 130 and 135, as amended, of the Commission. Pursuant to the
terms of the Agreement and Plan of Merger dated as of October 7, 1996, as it may
be amended, supplemented or modified from time to time (the "Agreement"), among
the Company, Xxxxxx & Xxxxx Corporation, a Tennessee corporation ("T&B"), and EG
Acquisitions Corp., a Delaware corporation ("Merger Sub"), Merger Sub will be
merged with and into the Company (the "Merger"). The capitalized terms used but
not defined herein shall have the meanings ascribed to such term in the Merger
Agreement.
I further understand that the Merger will be treated for financial
accounting purposes as a "pooling of interests" in accordance with generally
accepted accounting principles and that the staff of the Commission has issued
certain guidelines that should be followed to ensure the pooling of the
entities.
I hereby represent and warrant that, since 30 days before the
Stockholders Meeting to and including the date hereof, I have not sold,
transferred or otherwise disposed of any shares of common stock, par value $.10
per share, of the Company (the "Company Common Stock").
In consideration of the agreements contained herein, T&B's reliance on
this letter in connection with the consummation of the Merger and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, I hereby represent, warrant and agree that (i) I will not make any
sale, transfer or other disposition of Company Common Stock prior to the earlier
of the Effective Time and the termination of the Merger Agreement, (ii) I will
not make
A-1-1
53
any sale, transfer or other disposition of common stock, no par value of T&B
(the "T&B Common Stock") received by me pursuant to the Merger until after such
time as results covering at least 30 days of combined operations of the Company
and T&B have been published by T&B, in the form of a quarterly earnings report,
an effective registration statement filed with the Commission, a report to the
Commission on Form 10-K, 10-Q or 8-K, or any other public filing or announcement
which includes such combined results of operations, and (iii) I will not make
any sale, transfer or other disposition of any shares of T&B Common Stock
received by me pursuant to the Merger in violation of the Securities Act or the
Rules and Regulations. I have been advised that the issuance of the shares of
T&B Common Stock pursuant to the Merger will have been registered with the
Commission under the Securities Act on a Registration Statement on Form S-4. I
have also been advised, however, that since I may be deemed to be an affiliate
of the Company at the time the Merger is submitted for a vote of the
stockholders of the Company, the T&B Common Stock received by me can only be
sold (i) pursuant to an effective registration under the Securities Act, (ii) in
conformity with the volume and other limitations of Rule 145 promulgated by the
Commission under the Securities Act, or (iii) in reliance upon an exemption from
registration that is available under the Securities Act.
I also understand that instructions will be given to T&B's transfer
agent with respect to the T&B Common Stock to be received by me pursuant to the
Merger and that there will be placed on the certificates representing such
shares of T&B Common Stock, or any substitutions therefor, a legend stating in
substance as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ISSUED IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, APPLIES AND MAY ONLY
BE SOLD OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH THE
REQUIREMENTS OF RULE 145 OR PURSUANT TO A REGISTRATION
STATEMENT UNDER THAT ACT OR AN EXEMPTION FROM SUCH
REGISTRATION."
It is understood and agreed that the legend set forth above shall be
removed upon surrender of certificates bearing such legend by delivery of
substitute certificates without such legend if I shall have delivered to T&B an
opinion of counsel, in form and substance reasonably satisfactory to T&B, to the
effect that (i) the sale or disposition of the shares represented by the
surrendered certificates may be effected without registration of the offering,
sale and delivery of such shares under the Securities Act, and (ii) the shares
to be so transferred may be publicly offered, sold and delivered by the
transferee thereof without compliance with the registration provisions of the
Securities Act.
A-1-2
54
Execution of this letter should not be considered an admission on my
part that I am an "affiliate" of Xxxxx as described in the first paragraph of
this letter, or as a waiver of any rights I may have to object to any claim that
I am such an affiliate on or after the date of this letter.
If you are in agreement with the foregoing, please so indicate by
signing below and returning a copy of this letter to the undersigned, at which
time this letter shall become a binding agreement between us.
Very truly yours,
---------------------------
Name:
Title:
Accepted this ____ day
of ___________, 199_ by
XXXXXX & XXXXX CORPORATION
By:__________________________
Name:________________________
Title:_______________________
X-0-0
00
XXXXXXX X-0
___________, 199_
Xxxxx Inc.
00 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Gentlemen:
I have been advised that as of the date hereof, I may be deemed to be
an "affiliate" of Xxxxxx & Xxxxx Corporation, a Tennessee corporation ("T&B"),
as the term "affiliate" is (i) defined for purposes of paragraphs (c) and (d) of
Rule 145 of the rules and regulations of the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended, or (ii) used in
and for purposes of Accounting Series Releases 130 and 135, as amended, of the
Commission. Pursuant to the terms of the Agreement and Plan of Merger, dated as
of October 7, 1996, as it may be amended, supplemented or modified from time to
time, among Xxxxx Inc., a Massachusetts corporation ("Xxxxx"), T&B and EG
Acquisitions Corp., a Delaware corporation ("Merger Sub"), Merger Sub will be
merged with and into Xxxxx (the "Merger").
I further understand that the Merger will be treated for financial
accounting purposes as a "pooling of interests" in accordance with generally
accepted accounting principles and that the staff of the Commission has issued
certain guidelines that should be followed to ensure the pooling of the
entities.
I hereby represent and warrant that, since 30 days before the
Stockholder's Meeting to and including the date hereof, I have not sold,
transferred or otherwise disposed of any shares of common stock, no par value,
of T&B ("T&B Common Stock").
In consideration of the agreements contained herein, Augat's reliance
on this letter in connection with the consummation of the Merger and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, I hereby represent, warrant and agree that I will not sell,
transfer, or otherwise dispose of any shares of T&B Common Stock that I may hold
until after such time as results covering at least 30 days of combined
operations of Xxxxx and T&B have been published by T&B, in the form of a
quarterly earnings report, an
A-2-1
56
effective registration statement filed with the Commission, a report to the
Commission on Form 10-K, 10-Q or 8-K, or any other public filing or announcement
which includes such combined results of operations.
Execution of this letter should not be considered an admission on my
part that I am an "affiliate" of T&B as described in the first paragraph of this
letter, or as a waiver of any rights I may have to object to any claim that I am
such an affiliate on or after the date of this letter.
Very truly yours,
Name:
Title:
Accepted this ____ day of
_____________, 199_
XXXXX INC.
By:__________________________
Name:________________________
Title:_______________________
A-2-2
